Palestinian Authority prime minister Salam Fayyad has submitted his resignation to president Mahmoud Abbas, he said in a statement.

The move comes ahead of power-sharing talks between Abbas and his rivals Hamas, who control the Gaza Strip.

Fayyad's resignation paves the way for the formation of a national unity government, but he will not step down until that happens.

The move is being seen as conciliatory, as Hamas had demanded his departure.

Observers in the region say Fayyad's resignation appears to be part of the careful choreography aimed at the creation of a new Palestinian government of national unity.

But he will not actually step down until that government is in place, and there is no guarantee of that.

Delegations from Fatah and Hamas, as well as other Palestinian groups, have set up committees to look at forming a unity government and holding elections.

Talks have been going on in Cairo between the two sides.

An early indication of progress will come at the end of this month with an initial report into the shape of a future unity government.

The new government would also coordinate the rebuilding of Gaza.

The divisions between Fatah and Hamas have been seen as one of the stumbling blocks to progress towards an Israeli-Palestinian peace deal.