Mr Fayyad is a political independent included in the Hamas-led government.

Correspondents say the meeting is the first between a US official and a member of the new unity cabinet.

Israel is boycotting the government, while the US and EU have withheld recognition but left a door open for future ties.

They say they will judge the government on its actions and have indicated they will maintain contacts with ministers who are not members of Hamas - which they consider a terrorist organisation.

A former World Bank official, Mr Fayyad is not a member of Hamas. He has held the Palestinian finance portfolio before and won international respect as a keen reformer.

'Right to resist'

The Palestinian government had earlier defended its opening policy statement, in which Prime Minister Ismail Haniya said Palestinians had the right to resist Israeli occupation.

Information Minister Mustafa Barghouti said the government opposed any attacks on civilians and endorsed only resistance that was acceptable under international law.

He said Palestinians were also ready to end all forms of violence if Israel would agree to a comprehensive ceasefire.

Israel and the US have criticized the statement.

Israel says it will not deal with the new administration, and has called for a continued international boycott.

On Thursday, Mr Haniya unveiled a national unity cabinet after months of negotiations between his Hamas movement and Fatah.

Photo caption

Salam Fayyad