The central committee of Fatah, headed by president Mahmoud Abbas, agreed Saturday night to throw its support behind Mr. Fayyad, a member of the committee told Agence-France Presse on condition of anonymity.
“During a meeting last night at the presidential headquarters, we decided to nominate Salam Fayyad to head the Palestinian government,” the central committee member said.
Hamas had already hinted it would not support Mr. Fayyad candidacy, saying early on that it wanted a prime minister from Gaza. Mr. Fayyad was born in the West Bank.
And on Sunday, Hamas spokesman Sami Abu Zuhri downplayed the nomination, and warned that Hamas had made clear its opposition to Mr. Fayyad.
“Hamas informed Fatah during the last meeting of its rejection of the choice of Salam Fayyad to head the new government,” Mr. Zuhri told AFP.
“The Fatah central committee’s nomination of Salam Fayyad to head the government is a Fatah nomination and any head of the new government must be chosen by consensus and not, of course, by one of the parties,” he said.
Fatah’s decision comes ahead of a Tuesday meeting in Cairo between officials from the rival Palestinian factions, as the two sides try to hammer out a deal on the make-up of the new government called for in the unity deal.
The agreement calls for a government of independents to lay the groundwork for presidential and legislative elections within a year.
On Saturday night, after the central committee meeting, Fatah representative Azzam al-Ahmed, who helped broker the unity deal, said the next round of talks should yield a final government line-up.
The central committee “decided to continue communications with Hamas and the other factions in order to form the Palestinian government as soon as possible,” Mr. Ahmed said.
“The two sides will meet this Tuesday to form a government, and we hope that this will be the last round (of talks) needed to finish the make-up of the government,” he told AFP.
Fatah and Hamas have each been drawing up short lists of their candidates for the prime minister post.
Hamas has not yet announced its candidates for the position, but reports have suggested are considering two or three figures from Gaza.
The Palestinian leadership is also facing international pressure to keep Mr. Fayyad on, in a bid to reassure donors and maintain the flow of funds to the ailing Palestinian government.
His reappointment would ease Western concerns that donor money would fall into the hands of Hamas, which the West considers a terror organization.
The international community has roundly praised Mr. Fayyad, a US-educated economist and former World Bank official, for his efforts to build Palestinian institutions and prepare for statehood, even in the absence of peace talks with Israel. Israel, which also regards Hamas as a terrorist organization, says it would not accept a Palestinian government in which Hamas plays a role.
The reconciliation deal calls on Hamas and Fatah to deal with other thorny issues, including the release of political prisoners taken by both sides and the eventual integration of their respective security forces.
The unity deal is intended to end years of rivalry between the two groups, which boiled over in 2007, a year after Hamas won a surprise victory in legislative elections.
Fighters from the two groups fought street battles in Gaza, which saw Hamas rout Fatah, seizing control of the coastal strip and leaving Mr. Abbas’ party to run a parallel government unable to extend control beyond the West Bank.
(Sara Ghasemilee, a senior editor at Al Arabiya English