The deal, signed by Palestinian President Mahmoud Abbas of Fatah and Khaled Mashaal of Hamas, sets out key terms of a coalition government, including a promise to “respect” previous peace deals with Israel, reported the Associated Press.
The agreement also divides Cabinet posts.
Abbas designated Prime Minister Ismail Haniyeh of Hamas to draw up the government in the next five weeks according to the terms of the deal.
In answer to one of the main sticking points, Hamas is to propose an independent candidate to hold the position of interior minister, who would control Palestinian security forces. Abbas would then approve the candidate.
In a letter, Abbas said the deal would “satisfy our people … and bring us to the shores of peace. … This initiative has been crowned with success.”
Mashaal said the agreement “will unify our ranks. There is a commitment and unity. We will preserve this partnership.”
The agreement was greeted with fireworks and shots into the air in Gaza, where earlier gunfights between the rival factions had left at least 30 people dead and more than 200 wounded until a cease-fire took hold Sunday, according to the AP.
The United States, European Union, United Nations and Russia had stopped aid to the Palestinian government until Hamas renounced violence, recognized Israel and committed itself to existing peace accords.
Abbas, Israeli Prime Minister Ehud Olmert and Secretary of State Condoleezza Rice are scheduled to meet Feb. 19 in Jerusalem for talks aimed at restarting the peace process.