RAMALLAH (AFP) - Western-backed Palestinian Prime Minister Salam Fayyad stepped down on Saturday to try to pave the way for the formation of a national unity government and reconciliation with Hamas. Fayyad's office said his resignation would take effect following the formation of a "national consensus government" that Palestinian factions hope to assemble by the end of the month. Palestinian President Mahmud Abbas appointed the politically independent former World Bank economist as premier, following the Hamas movement's June 2007 takeover of Gaza from forces loyal to Abbas. Palestinian factions met in Cairo on February 26 to launch a reconciliation process aimed at forming a national unity government in the wake of Israel's massive offensive against Gaza at the turn of the year. The factions, including Hamas and Palestinian Abbas' secular Fatah party, agreed to form five committees to oversee the creation of a govt that would supervise Gaza reconstruction and prepare for presidential and parliamentary elections in January 2010. Fayyad's office said "we consider that the positive climate seen in the first round of dialogue offers an opportunity that has to be exploited to put an end to divisions and as a basis on which to reach unity and reconciliation." The committees are set to convene in Cairo on Tuesday, and Abbas said Fayyad would remain as acting prime minister while the talks continue. "We have asked Salam Fayyad to continue his work until we see the results of the dialogue," Abbas told reporters in Ramallah. Hamas, which won parliamentary elections in 2006, never recognised the Fayyad-led government appointed after the takeover and still considers its own Ismail Haniya to be the prime minister. "Hamas is not sorry to see the resignation of Fayyad and his government," spokesman Fawzi Barhum said. "This is the end we expected because this government is illegitimate and illegal and built on failed and mistaken policies connected to American agendas." French Foreign Minister Bernard Kouchner welcomed Fayyad's decision, calling him "a great prime minister" and a "man of conviction and action." Fayyad had sought to lead post-war reconstruction efforts in Gaza, and developed a plan for rebuilding that won pledges of some $4.5b from the international community at a donors' conference in Egypt last week.