The leaders of the rival Palestinian movements Fatah and Hamas announced they have agreed to form an interim unity government led by Mahmoud Abbas, who is president of the Palestinian Authority.
Abbas and Khaled Meshaal, head of the militant Islamist Hamas, said Monday the two groups would form a government that would pave the way for presidential and parliamentary elections later this year, but no timetable was set.
The deal between the rival Palestinian leaders was announced in Doha, Qatar.
The Western-backed Palestinian premier Salam Fayyad would have to step down if a government is formed. Fayyad said he welcomed the pact and is ready to implement it.
Both sides said they are serious about carrying out the new agreement. Meshaal said it creates greater unity "in order to be free for facing the enemy," referring to Israel.
Israeli Prime Minister Benjamin Netanyahu said Monday it would be impossible to hold peace talks if the Palestinians go through with the pact. He said if Abbas makes a pact with Hamas he will "abandon the way of peace."