HARI SREENIVASAN: The two main Palestinian groups were officially reconciled today. But it raised new questions about peace prospects in the Middle East.
Margaret Warner has the story.
MARGARET WARNER: After four years of bitter division, the two rival Palestinian factions signed today's unity accord in Cairo, Egypt.
MARGARET WARNER: Palestinian President Mahmoud Abbas represented Fatah, which leads the Palestinian Authority. He was joined by Hamas leader Khaled Meshaal and by Egyptian officials who brokered the deal.
Under the agreement, a caretaker government of technocrats will prepare for national elections next year. The deal made no mention of what this would mean for Palestinian relations with Israel or the prospect of resuming peace talks.
Hamas' charter calls for the destruction of Israel.
KHALED MESHAAL, Hamas leader (through translator): Our first and true battle is with the Israeli enemy and not with Palestinian factions or among sons of one homeland.
MARGARET WARNER: Israeli Prime Minister Benjamin Netanyahu denounced the Palestinian pact.
BENJAMIN NETANYAHU, Israeli prime minister: What happened today in Cairo is a tremendous blow to peace and a great victory for terrorism.
MARGARET WARNER: What happened today in Cairo was driven by dramatic changes in the Middle East that left both parties feeling insecure. Fatah lost its closest Arab ally when former Egypt President Hosni Mubarak fell. And Hamas' main backer, Syrian President Bashar Assad, is beset with protests at
President Abbas rejected Israel's criticism of the deal. He said reconciliation is an internal matter for Palestinians. Tensions over policy toward Israel helped bring down a previous Palestinian unity government in June of 2007, and sparked a civil war.
After five days of fighting, Hamas seized control of Gaza, and expelled Fatah from there. That left two competing Palestinian governments, with Hamas running Gaza, and the Palestinian Authority controlling the West Bank.
In January of 2009, Israel invaded Gaza, seeking to end a barrage of rocket fire by Hamas militants. An unofficial truce followed, and Hamas said this week it would continue to abide by the cease-fire.
Today, Palestinians on both sides celebrated the unity deal. Hundreds of people took to the streets in the West Bank. And in Gaza, Hamas permitted residents to wave yellow Fatah banners, along with the green Hamas flags, for the first time in four years.
HARI SREENIVASAN: In Washington, a State Department spokesman voiced reservations about the Palestinian agreement, but he said, we will wait and see what this looks like in real and practical terms.
European Union officials today defended the bailout deal given to Portugal. They said the terms are severe and in line with what Greece and Ireland received. The Portuguese Prime Minister, Jose Socrates, had claimed he won easier terms in the $115 billion bailout. He said Portugal was spared from public sector pay cuts and changes to the retirement age.
New jobs data today raised questions about economic recovery in the U.S. The payroll firm ADP reported, private companies added 179,000 jobs in April. That's well under projections. Wall Street reacted with a third straight decline. The Dow Jones industrial average lost nearly 84 points to close at 12,723. The Nasdaq fell 13 points to close at 2,828.
Those are some of the day's major stories.