The Gaza-based Islamist group Hamas and President Mahmoud Abbas\’s Palestine Liberation Organization (PLO) agreed on Wednesday to implement a unity pact, both sides announced in a joint news conference.
They have agreed to begin negotiations to form a unity government within the coming weeks.
At the talks in the Gaza Strip, the delegations reached “common ground in principle” and will now move forward in working out the details of the agreement.
It comes as peace talks between the Fatah party of Palestinian President Mahmoud Abbas and Israel face collapse.
This is not the first time Fatah and Hamas have tried to reconcile in recent years, but such agreements were never implemented.
The latest deal was announced at a news conference between Fatah and Hamas, an Islamist group banned as a terrorist organisation by Israel, the US and the EU.
They said they planned to form an interim unity government within five weeks and hold general elections within six months of a vote of confidence by the Palestinian parliament.
The sides also agreed to enhance a reform of the Palestine Liberation Organization (PLO) to involve all factions.
Ismail Haniyeh, the Hamas leader who announced the terms of the agreement, said the deal came as "the entire city of Jerusalem has been painted Jewish with an attempt to wipe out the Arab identity and desecrate the Muslim and Christian sanctities".
Azzam al-Ahmed, the Fatah delegation head, said he hoped the pact "will be a true beginning for a true partnership in all our spectrums; political, social and societal".
Hamas has been in power in Gaza since 2007, while rival Palestinian faction Fatah holds sway in the West Bank. The factions earlier signed similar reconciliation agreements, but have yet failed to make progress on forming a united government.