By Sue Pleming and Noah Barkin
BERLIN, Feb 21 (Reuters) - The quartet of Middle East mediators put off a decision on Wednesday on how to handle a new Palestinian unity government amid divisions between the United States and Russia on an aid embargo.
The quartet, comprising Russia, the United States, the European Union and the United Nations, met in Berlin to discuss how to proceed in the face of a new power-sharing pact between Islamist Hamas and President Mahmoud Abbas's Fatah party.
Speaking to reporters after a 2-1/2 hour meeting, they repeated a demand that any Palestinian government renounce violence, recognise Israel and respect peace deals.
But the tone of U.S. Secretary of State Condoleezza Rice's comments was sharper than that of her Russian and European counterparts, reflecting deep U.S. concerns about dealing with a government that includes the militant Hamas party.
"How can it be that you will have talks about peace if one party does not accept the right of the other party to exist," said Rice, referring to Hamas's rejection of Israel.
"How can it be that you have discussions about peace when a party will not renounce violence."
British Prime Minister Tony Blair indicated he might be prepared to adopt a softer stance. After meeting Abbas in London he said it was possible to make progress in the Middle East with "sensible" members of the Islamist Hamas party.
Russia wants the quartet to back the coalition deal and has been reticent about maintaining an aid embargo that has been in place since Hamas took power.
"One certainly should not speak of a boycott," Russian Foreign Minister Sergei Lavrov told the same news conference.
SOFTER LINE
Other European governments also appear to favour a softer line and believe the coalition deal, which ended weeks of fighting between Hamas and Fatah in which more than 90 people died, can avert a Palestinian civil war.
By shunning a new government before it is formed, as Israel has, the Europeans fear this will weaken the moderate leader Abbas and stunt hopes to move along the peace process.
Abbas, who is on a tour of European capitals to get support for the unity government, is scheduled to meet German Chancellor Angela Merkel on Friday.
Hamas leader Khaled Meshaal kicked off a similar mission on Wednesday, stopping first in Cairo. He also plans to visit Russia and Iran.
Hamas has said it hopes Washington and the rest of the quartet will soften their position, while Arab nations such as Egypt and Saudi Arabia, which helped broker the coalition deal in Mecca, believe the government should be given a chance.
Rice also reported back to the quartet, which will hold its next meeting in an unspecified Middle Eastern country, on a Jerusalem summit she hosted on Monday between Abbas and Israeli Prime Minister Ehud Olmert.
(Additional reporting by Madeline Chambers and Tom Armitage) (Editing by Sophie Hares; Email: noah.barkin@reuters.com; Telephone: +49 30 2888 5091)