The Palestinian President, Mr Yasser Arafat, is said to be seriously considering including representatives from Hamas and other militant factions ideologically opposed to Israel in a reconstituted Palestinian Authority leadership. The move might draw Palestinian support but would horrify Israel.
The Palestinian Information Minister, Mr Yasser Abed Rabbo, said in a newspaper Mr Arafat would open talks on a "unity" government in the next few days.
The news came on another day of heavy Intifada violence, which saw two Israeli helicopter raids on Palestinian positions in Nablus, following the overnight killing of a West Bank settler, and a Hamas suicide bombing in the Jordan valley in which the bomber was killed and an Israeli soldier slightly wounded. Later, two Israeli soldiers were also hurt when a Hamas bomb exploded on a hill overlooking Nablus.
Earlier this week, Mr Marwan Barghouti, a leader of Mr Arafat's Fatah faction in the West Bank who is seen as a key player in the 10-month Intifada conflict, called for the establishment of a Palestinian unity government. He said it was "the right of whoever took part in the struggle against the occupation, and made sacrifices, to take part in the decision-making process concerning the future of the Palestinian nation".
Mr Barghouti's call reflected the growing co-operation between Fatah forces and the Islamists, and growing public support for the militants; a recent Palestinian opinion poll showed 58 per cent backed attacks on Israeli citizens in Israel.
A new Israeli poll, which shows 70 per cent support for the government's policy of eliminating alleged Intifada kingpins.
Mr Abed Rabbo, interviewed by the Al-Ayaam newspaper, said the talks would also involve formulating a plan of defence against "the continuing Israeli aggression in the territories".
But another of Mr Arafat's ministers, Mr Nabil Sha'ath, was sceptical that the Palestinian Authority could strike a partnership with Hamas, Islamic Jihad and other factions committed to Israel's destruction.
Such groups would likely demand that the Palestinian Authority cut all ties with Israel, Mr Sha'ath said, which would be "illogical and impossible".
Whether or not "unity" talks were to reach fruition, the very act of Mr Arafat openly negotiating with the Islamic radicals would provoke a furious reaction from Israel, which embarked upon the now-collapsed Oslo peace process with Mr Arafat eight years ago on the basis that he would confront, not consort with, such groups.
Meanwhile, the Israeli Prime Minister, Mr Ariel Sharon, paid a one-day visit to Israel's only close regional ally, Turkey, where the Prime Minister, Mr Bulent Ecevit, urged him to accept an international observer force - something Mr Sharon again rejected.