Egypt has proposed a new compromise formula to break the deadlock in reconciliation talks between Fatah and Hamas, an Arab daily has reported.

Quoting “knowledgeable sources,” Saudi-owned daily A-Sharq Al-Awsat reported Sunday that Egypt plans to pressure both Fatah and Hamas to forgo a respective key demand.

Hamas, which aspires to join the PLO, has demanded that elections for the PLO’s Palestinian National Council (PNC) — the movement’s legislative body — take place simultaneously with parliamentary and presidential elections in the PA.

Fatah, which would like to hold general elections as soon as possible, had demanded that the unity government — the formation of which was decided in Doha, Qatar, in February 2012 — will serve as an interim government for no more than three months and be tasked solely with preparing for national elections.

The Times of Israel was unable to independently confirm the report, but it was uploaded to Fatah’s official website, a sign that the Egyptian proposal was probably “serious and concrete,” said Fatah expert Ido Zelkovitz of Haifa University.

Egyptian intelligence, A-Sharq Al-Awsat’s sources said, has grown confident that both conditions are unreasonable, and decided to propose their mutual cancellation.

Reconciliation talks scheduled to take place in Cairo in late February were cancelled, with Hamas accusing the United States and Israel of exerting pressure on Abbas to freeze talks in order to bolster Israeli-Palestinian negotiations, which Hamas adamantly opposes.

According to the sources, Egypt intends to propose that Hamas and Fatah both maintain their own security agencies in the respective territories under their control, considering that security reorganization at this stage would render reconciliation efforts impossible.

“The Egyptians are completely convinced that deep mistrust [between Fatah and Hamas] is preventing a breakthrough in reconciliation efforts,” the sources were quoted by A-Sharq Al-Awsat as saying.

Hamas and Fatah have been at loggerheads since the violent Hamas takeover of the Gaza Strip in June 2007.