* Unity proving elusive for bitter Palestinian rivals
* Seven Fatah men released from Gaza jail
* Hamas gesture coincides with its deepening isolation
By Nidal al-Mughrabi
GAZA, Jan 8 (Reuters) - The Hamas government in the Gaza Strip freed seven imprisoned members of Palestinian President Mahmoud Abbas's Fatah faction on Wednesday, saying it was trying to promote reconciliation with its West Bank-based rival.
Hamas, which seized Gaza from Western-backed Fatah in 2007, made the unity gesture at a time when the Islamist movement is grappling with a rift with neighbouring Egypt's military-backed government that has damaged and isolated the enclave's economy.
Relatives of the seven released prisoners welcomed them with kisses outside a Gaza jail, where they had been serving terms of up to two years for what Hamas described as security offences. Fatah said they were jailed for political reasons.
Both Hamas and Fatah have been accused by human rights groups of carrying out wide-scale arrests of each other's members and abusing them while in detention. Hamas and Fatah both number their jailed members in the dozens and demand their freedom.
Islam Shahwan, spokesman for the Hamas-run Interior Ministry, called the release an effort "to reinforce national reconciliation" - a goal that has proved elusive.
On Monday, Hamas said hundreds of Fatah members, exiled from Gaza since a brief civil war in 2007, could return. Fatah, however, dismissed the move as superficial and called on Hamas to implement past accords on Palestinian unity.
In 2011, Hamas and Fatah leaders committed to an Egyptian-backed unity deal. But it dissipated in disputes over sharing power and devising a common strategy in the long conflict with Israel.
Abbas, who governs in Palestinian self-rule areas of the Israeli-occupied West Bank, is engaged in U.S.-brokered statehood talks with Israel. Hamas is shunned by the West over its refusal to renounce violence, recognise Israel and accept existing interim peace deals.
RECONCILIATION AND RECIPROCATION
"We hope reconciliation can be achieved soon," one of the freed prisoners, Fatah member Saleh Abdel-Salam, told reporters. "Our enemy is one and we should devote our attention to our Palestinian cause."
Hamas urged Fatah to reciprocate for the prisoner release.
"The Hamas movement in the West Bank awaits positive decisions that will enable it to resume its public, social, trade union and political activities," Khaled al-Haj, a Hamas official in the territory, said in a statement.
Jamal Mheisen, a member of the Fatah Central Committee, called in turn for Hamas to implement the unity deal, saying anything short of that did not constitute progress toward ending political divisions.
Hamas also has been going through financial and diplomatic difficulties in its relations around the Middle East.
The Syrian government, once a top backer, is now embroiled in war with rebels seeking to topple President Bashar al-Assad.
Hamas suffered a heavy blow when Egypt's Islamist president, Mohamed Mursi, was toppled by the military last July after mass protests against his rule. Cairo's current military-backed government sees Hamas as a threat to Egyptian security.
Hamas leaders have denied any intervention in Egypt's internal affairs and say the group poses no security threat to the Arab world's largest country.
(Additional reporting by Ali Sawafta in Ramallah; Editing by Jeffrey Heller/Mark Heinrich)