The leaders of two main Palestinian-factions, Fatah and Hamas have signed a reconciliation agreement paving the way for the formation of transitional national unity government followed by elections.

The pact is widely seen as a fallout of the Egyptian uprising that resulted in the formation of military-led transitional government in Cairo, which played a key role brokering the intra-Palestinian accord.

The accord signed on Wednesday, ending a four year feud between Fatah and Hamas, will be followed by preparations for the formation of an interim government.

Three separate committees are to be formed, which will plan for the upcoming polls, and recommend internal reforms within the Palestine Liberation Organisation (PLO) — the umbrella group of the Palestinian factions. One of the committees would also study new security arrangements between Gaza and the occupied West Bank.

Bitter fighting in 2007 had led to the exit of forces loyal to Fatah from Gaza, which, has since been administered by the Islamist Hamas.

Hamas leader Khaled Meshaal said in a veiled reference to the “Arab spring” — the season of Arab uprisings — that the accord reflected a newly discovered spirit of Arab and Palestinian assertion. Speaking in Cairo on Tuesday night, he said that the pact marked the beginning of “a new Arab era and a new Palestinian era, putting Israel in a corner”.

On Wednesday, after the accord had been signed, he stressed that a new and viable Palestinian state should emerge on land occupied by Israel in the 1967 Arab-Israeli war. “Our aim is to establish a free and completely sovereign Palestinian state on the West Bank and Gaza Strip, whose capital is Jerusalem, without any settlers and without giving up a single inch of land and without giving up on the right of return [of Palestinian refugees],” he said.

A more cautious, Palestinian Authority President, Mahmoud Abbas observed that there were “no guarantees for the success of the agreement, which has many enemies and there are attempts to undermine the agreement from several parties”.

In an interview with Egypt's Al-Ahram newspaper, Mr. Abbas said that the agreement did not oblige Hamas to recognise Israel. “We will form a government of technocrats and we will not ask Hamas to recognise Israel.”

Israel has rejected the pact, and reinforced it with a warning to Mr. Abbas that he must “choose between Israel or peace with Hamas, who “aspires to destroy Israel.”

Analysts say that the accord reflects new geopolitical realities where an assertive Egypt, after the exit of its former President, Hosni Mubarak, is seeking new regional allies, including a willing Iran.

On Monday, Iranian Foreign Minister speaking in Doha said that cooperation between Iran and Egypt “especially in the political sphere, will contribute to the stability, security, and peace in the region”.

However, observers are of the view that Tel Aviv is unlikely to face undue international pressure so long as Hamas refuses to recognise Israel's right to exist. On Sunday, Israel's chief ally, the United States said in a statement that “any Palestinian government must…renounce violence, abide by past agreements, and recognise Israel's right to exist.”

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