Spain's ruling Socialist Party (PSE) and the opposition Popular Party (PP) on Wednesday signed a historic deal to form a regional administration in the country's troubled Basque region, thereby ending three decades of Nationalist rule in the region.

The move comes after the Basque Nationalist Party (PNV) failed to secure an absolute majority in last month's elections. This gave the Spanish Prime Minister Jose Luis Rodriguez Zapatero's PSE and the conservative PP a joint majority of 38 seats in the 75-member regional parliament.

According to the deal, socialist leader Patxi Lopez would be sworn in as the regional prime minister in late April or May, making him the first Basque prime minister who backs the region's unity with Spain since it was granted autonomy in 1979.

The two parties have pledged to encourage the Basque culture and to allot increased funds to the police for tackling the ETA militant separatist group.

The ETA militants, based in the Basque region of northern Spain, have carried out numerous attacks in Spain, killing more than 800 people since the 1960's. They are fighting for a separate state in the Basque region located in between Spain and France, and the ETA is considered a terrorist group by Spain, the European Union and the United States.

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