The leaders of rival Palestinian factions Fatah and Hamas signed a deal in Qatar on Monday to form a unity government of independent technocrats for the West Bank and Gaza, headed by Palestinian President Mahmoud Abbas.
The move, following the failure of exploratory Israeli-Palestinian talks aimed at reviving stalled peace negotiations, was condemned by Israel, which says the Islamist Hamas cannot be part of any peace efforts.
The accord signed by President Mahmoud Abbas and Hamas leader Khaled Meshaal is supposed to pave the way for Palestinian presidential and parliamentary election possibly later this year, and to rebuild the Hamas-ruled Gaza Strip following a 2008-2009 Israeli offensive against Hamas.
It was not known whether the deal would be implemented. No timetable was set. A reconciliation pact Fatah and Hamas struck in May 2011 has had little substantive result but both sides said they were serious about carrying out the new accord.
Abbas' Palestinian Authority supports a negotiated peace with Israel that would give Palestinians an independent state in the Israeli-occupied West Bank and in Gaza, co-existing alongside the Jewish state.
Meshaal's Hamas is officially sworn to the destruction of Israel but is open to an indefinite ceasefire.
Their conflicting positions have not been resolved despite the new deal, as Israeli Prime Minister Benjamin Netanyahu wasted no time in pointing out.
Hamas is a terrorist organisation which strives to destroy Israel and relies on support from Iran, he said. I have said many times in the past that the Palestinian Authority must choose between an alliance with Hamas and peace with Israel. Hamas and peace don't go together.
If Abbas implements the Doha pact, the Israeli leader added, then he is choosing to abandon the path of peace and to choose Hamas ... You cannot have it both ways.
Palestinian political analyst Hani al Masri said: They (Fatah and Hamas) are avoiding the main issue. They are waiting to see what the international community's reaction will be. This leaves all the important issues unresolved.
A diplomat in the region, who declined to named, said Hamas leaders in Gaza appeared to have been surprised by the Doha announcement and were likely to raise questions with Meshaal, who has until recently lived in exile in Damascus.
The agreement in Doha did not have a normal birth, I mean it did not come in complete coordination within Hamas. The whole thing came as a surprise in Gaza. We have to watch whether it will work, the diplomat said.
Meshaal took Hamas by surprise in December by announcing he would not seek to extend his leadership when an internal election is held in March. Analysts said his resignation was more likely to be a back-me-or-sack-me ploy to reassert his control in order to soften Hamas policies in line with Abbas.
Fatah and Hamas have been bitter rivals since the Islamist movement seized control of Gaza in a brief war in 2007 and expelled Abbas' Fatah-led Palestinian Authority.
PM FAYYAD OUT, BUT WHEN?
Monday's deal provided for a government of independent technocrats to oversee preparations for elections later this year. A vote had been mooted in May but the Palestinian election commission says more time will be needed.
Abbas and Meshaal, who signed the deal billed as the Doha Declaration in the presence of Qatari Emir Sheikh Hamad bin Khalifa al-Thani, pledged to ensure quick implementation.
We are serious, both Fatah and Hamas, in healing the wounds and ending the chapter of division and reinforcing and accomplishing reconciliation, Meshaal said in comments televised live by Al Jazeera from Qatar.
He said Palestinians wanted to accomplish unity and move forward to resist the enemy (Israel) and achieve our national goals. Abbas, head of the secular Fatah movement, promised that this effort will be implemented in the shortest time possible.
There was no immediate comment from Israel, which has warned Abbas that turning to Hamas amounts to turning away from peace.
A senior Palestinian official said that under Monday's agreement, Abbas would assume the role of prime minister, replacing Western-backed economist Salam Fayyad.
It was not immediately clear if Fayyad, whose dismissal was one of the main Hamas conditions for a deal, would be a member of the new government or when the cabinet would be formed.
Fayyad welcomed the accord, and was expected to remain in his post until the new government takes over.
The prime minister saw this as a response to the aspirations of our people to restore unity to the homeland and its institutions, said a statement issued by his office.
Ismail Haniyeh, who heads the Hamas government in Gaza, also welcomed the deal and said he was ready to help implement it.
The last presidential and parliamentary elections were held in 2006. Hamas won the parliamentary vote and briefly formed a government but it was shunned internationally and later dissolved by Abbas.
Separately, Fayyad met union leaders and employers on Monday to pursue agreement on the 2012 budget after a public outcry against austerity steps thwarted his first plan to tackle a debt crisis, prompted in part by a cut-off of U.S. aid.
(Additional reporting by Nidal al-Mughrabi in Gaza, Jihan Abdalla in Ramallah, Ori Lewis in Jerusalem. Writing by Sami Aboudi; Editing by Douglas Hamilton and Mark Heinrich)