A general strike in Israel entered its third day on Friday after negotiations between unions and government broke down, a spokesman for the Histadrut labour federation told AFP.

"The sides have not yet reached an agreement, and will resume talks later in the day," the spokesman said.

Representatives of the powerful labour federation and the finance ministry failed late Thursday to resolve the dispute over the rights of contract workers, who have lower salaries than their full-time colleagues, few benefits and can be fired without notice.

The Ben Gurion international airport and Israel's harbours will remain open, while employees of government offices and banks -- normally closed in Israel on Fridays regardless -- continue the open-ended strike.

On Wednesday, Histadrut officials and private employers' representatives reached agreement in principle over improved working conditions for contract workers. The unions are now trying to seal a similar deal for the public sector.

According to reports, such a deal was near completion on Thursday night, but talks fell apart due to a demand of Finance Minister Yuval Steinitz that, after signing the agreement, Histadrut would commit to not strike over contract workers for four years.

In addition, Histadrut was claiming that there were not sufficiently clear criteria regarding exactly which public sector contract workers would be transferred to direct employment in the framework of a new deal.

The sides will meet at noon in the office of Histadrut chief Ofer Eini for another round of talks.

The issue of contract workers has been simmering for months, with Histadrut staging a four-hour general strike over the same disagreement in November.

The federation says employment of contract workers has mushroomed, particularly in the public sector.

It wants to see contract workers receive the same benefits as others, and has called on the government to hire some of the contract workers as full employees.

The government says it is willing to make some concessions on the status of contract workers but that it would be economically disastrous to offer them all the same rights as full staff.