(Releads with Hamas saying dispute over)
GAZA, June 2 (Reuters) - A last-minute hitch in the formation of a Palestinian unity government was resolved on Monday, a Hamas official said, and President Mahmoud Abbas prepared to swear in the new ministers.
Hamas had announced that it would not support the new administration because of a decision by Abbas to scrap the Ministry for Prisoner Affairs and replace it with a committee that would have fallen outside the control of the cabinet.
But Hamas official Salah Al-Bardaweel said it was agreed that the ministry would be given to Prime Minister Rami Al-Hamdallah, "and the dispute between Hamas and Fatah has been resolved".
The prisoners' minister deals with Palestinians held in Israeli jails. Palestinians view the detainees as freedom fighters while Israel denounces them as terrorists.
Israel has urged the United States and Europe to shun any unity government supported by Hamas, which does not recognise Israel's right to exist and has not renounced violence. (Reporting by Nidal al-Mughrabi, Writing by Crispian Balmer, Editing by Jeffrey Heller)