RAMALLAH (Reuters) - Deep divisions will limit progress at reconciliation talks between Palestinian factions Hamas and Fatah this month, conversations with five sources in the groups indicate, but the meetings highlight that the Islamist group is likely to retain influence after Israel's war in Gaza.

The talks between Hamas and the Fatah party of Palestinian President Mahmoud Abbas will be held in China in mid-June, according to officials from both sides. They follow two recent rounds of reconciliation talks, one in China and one in Russia. China's foreign ministry declined to comment.

The next meeting will be held amid attempts by international mediators to reach a ceasefire deal for Gaza, with one of the key sticking points being the "day-after" plan - how the enclave will be governed.

Considered a terrorist organisation by many Western nations, Hamas was shunned long before its Oct. 7 attacks killed 1,200 people in Israel, with more than 250 hostages taken, triggering the war in Gaza.

But even as it is pummelled militarily, the meetings of Hamas politicians with officials from the Fatah party that controls Palestinian politics in the Israeli-occupied West Bank point to the group's aim of shaping the post-war order in the Palestinian territories, according to a source familiar with conversations within Hamas.

The person, like other unnamed officials in this story, declined to be named because they weren't authorized to discuss sensitive matters with the media.

Hamas, which ruled Gaza before the war, recognises it cannot be part of any internationally recognised new government of the Palestinian territories when fighting in the enclave eventually ends, said the source.

Nonetheless, it wants Fatah to agree to a new technocratic administration for the West Bank and Gaza as part of a wider political deal, the source and senior Hamas official Basim Naim said.

"We are speaking about political partnership and political unity to restructure the Palestinian entity," Naim, who attended the previous round of China talks, said in an interview.

"Whether Hamas is in the government or outside it, that is not a prime demand of the movement and it doesn't see it a condition for any reconciliation," he said. Naim, like much of Hamas' political leadership, operates in exile outside of Gaza.

The prospect of Hamas surviving as an influential political player is a thorny issue for Western states.

Despite Israeli Prime Minister Benjamin Netanyahu's Gaza war goal of destroying the Iran-backed group, most observers agree Hamas will exist in some form after a ceasefire. An offshoot of the Muslim Brotherhood, the movement has deep reach and ideological roots in Palestinian society.

The United States and EU oppose any role for Hamas in governing Gaza after the war, during which Israel's offensive has killed more than 36,000 Palestinians, according to the Gazan health ministry.

Still, some U.S. officials have privately expressed doubt Israel will eradicate the group. A senior U.S. official said on May 14 Washington thought it unlikely Israel could achieve "total victory".

Killing every member of Hamas was unrealistic and was not the goal of the Israeli army, but destroying Hamas as a governing authority was "an achievable and attainable military objective," said Peter Lerner, a spokesperson for Israel's military.

LOW ODDS

Western states support the idea of post-war Gaza being run by a revamped Palestinian Authority (PA), the administration led by Abbas that has limited self-rule over patches of the West Bank. Based in Ramallah, the PA is broadly acknowledged globally as representing the Palestinians and receives security assistance from the United States and the EU.

Led by Abbas, and before him Yasser Arafat, Fatah was the undisputed leader of the Palestinian cause for decades until the rise of Hamas, an Islamist movement.

The PA also ran Gaza until 2007, when Hamas drove Fatah from the enclave, a year after defeating Fatah in parliamentary elections - the last time Palestinians voted.

Despite the talks, the factions' enmity means odds remain low for a deal to reunite the administration of the Palestinian territories, the conversations with the five sources indicated, a view echoed by four experts.

"My expectations of rapprochement are minimal or less," said Yezid Sayigh, a senior fellow at the Carnegie Middle East Center.

Palestinians aspire to a state on all territory occupied by Israel in the 1967 war, when Israel seized the West Bank - including East Jerusalem - and the Gaza Strip.

Despite 143 countries recognising Palestine, including Ireland, Spain and Norway last week, hopes for a sovereign nation have been diminishing for years as Israel expands settlements in the West Bank and opposes statehood.

The Hamas-Fatah split further complicates the goal. The factions hold deeply diverging views about strategy, with Fatah committed to negotiations with Israel to bring about an independent nation while Hamas backs armed struggle and does not recognise Israel.

The bitterness spilled into the open at an Arab summit in May, when Abbas accused Hamas of giving Israel "more pretexts" to destroy Gaza by launching the Oct. 7 attack.

Hamas said the remark was regrettable, calling Oct. 7 a crucial moment in the Palestinian struggle.

Hamas' 1988 founding charter called for Israel's destruction. In 2017, Hamas said it agreed to a transitional Palestinian state within frontiers pre-dating the 1967 war, though it still opposed recognising Israel's right to exist.

Hamas has restated this position since the eruption of the Gaza war.

NEW GOVERNMENT?

In March, Abbas swore in a new PA cabinet headed by Mohammed Mustafa, a close Abbas aide who oversaw Gaza reconstruction during a previous stint in government from 2013 to 2014. Though the cabinet is made up of technocrats, Abbas' move angered Hamas, which accused him of acting unilaterally.

Senior Fatah official Sabri Saidam told Reuters that forming a new government would amount to wasting time.

A second senior official familiar with Fatah's terms for the China talks said it wants Hamas to acknowledge the role of the Palestine Liberation Organisation (PLO) as the Palestinians' sole legitimate representative, and to commit to the agreements the PLO has signed.

This would include the Oslo accords signed 30 years ago under which the PLO recognised Israel and which Hamas violently opposed.

The official said Fatah would want the government to have full security and administrative control in Gaza - a challenge to Hamas' sway there.

Fundamentally at odds with the PLO over Israel, Hamas has never joined the body but has long called for elections to its governing institutions, including its legislative body known as the PNC.

Hamas political leader Ismail Haniyeh said on Friday that in addition to a government of "national consensus", the group wants elections for the PA presidency, parliament and the PNC.

Ghassan Khatib, a lecturer at Birzeit University in the West Bank, said Hamas was interested in reconciliation only on its terms, maintaining its politics, security apparatus and ideology, which he said would risk plunging the PLO into international isolation.

"Abbas cannot accept them with their politics, because that would jeopardize the only PLO achievement - international recognition," he said.

PART OF THE FABRIC

Despite this, Fatah official Tayseer Nasrallah said Fatah viewed Hamas as part of "the Palestinian national fabric and part of the political fabric also".

Saidam said consensus was necessary to manage aid and reconstruction in Gaza. Fatah had made clear it would not return to Gaza "on the back of an (Israeli) tank, but rather we will come in agreement with everyone", he added.

Israeli government spokesperson Tal Heinrich said the PA's willingness to work with Hamas was "unfortunate."

An opinion poll conducted in the West Bank and Gaza by the Palestinian Center for Policy and Survey Research in March showed Hamas enjoying more support than Fatah, with its popularity still higher than before the war.

Being hosted by China has marked a diplomatic boost for the Iran-backed Hamas.

Ashraf Abouelhoul, managing editor of the Egyptian state-owned paper Al-Ahram and a specialist on Palestinian affairs, said Hamas was more interested in a deal than Fatah, because reconciliation could give the battle-weary organisation cover to rebuild.

Mohanad Hage Ali of the Carnegie Middle East Center said it was difficult to imagine Hamas embarking on any military action that would prompt large-scale Israeli retaliation in the foreseeable future.

But, he said, reconciliation would be a "transitional phase that would allow Hamas to slowly rearm.".

(Additional reporting by Tom Perry in Beirut, Laurie Chen in Beijing, James MacKenzie in Jerusalem, Matt Spetalnick in Washington and John Irish in Paris; Writing by Tom Perry; Editing by Frank Jack Daniel)

By Ali Sawafta and Nidal al-Mughrabi