Palestinian factions Fatah and Hamas have announced a reconciliation deal.

The rival factions said they will seek to form a unity government in the coming weeks.

The move comes as the peace talks between President Authority President Mahmoud Abbas and Israel near collapse.

Hamas and Fatah split violently in 2007. Previous reconciliation agreements have never been implemented.

Israel’s prime minister said Mahmoud Abbas would have to choose between peace with Israel and peace with Hamas.

“You can have one but not the other. I hope he chooses peace; so far he hasn’t done so,” warned Benjamin Netanyahu.

Palestinian officials responded by saying reconciliation is an internal matter and uniting Palestinian people would reinforce peace.

Fatah and Hamas have announced reconciliation deal (photo Reuters)

Mahmoud Abbas sent a delegation from his Fatah party to Gaza for reconciliation talks earlier this week.

Wednesday’s announcement was made at a news conference by representatives of Fatah and Hamas, an Islamist group designated a terrorist organization by Israel, the US and the EU.

The factions said they planned to form an interim unity government – headed by Mahmoud Abbas – within five weeks and hold parliamentary elections within six months.

“This is the good news we tell our people,” Ismail Haniyeh, prime minister of the Hamas-led government in Gaza, told reporters.

“The era of division is over.”

The news brought thousands of Palestinians out on to the streets of Gaza City in celebration.

Ordinary Palestinians have long hoped for an end to the split between their political leaders but previous reconciliation deals in Doha and Cairo were never implemented.

The agreement will strengthen the position of Mahmoud Abbas – whose Fatah movement dominates the Palestinian Authority, which controls parts of the West Bank – and should also make Hamas feel less isolated as it continues to face border restrictions imposed by Israel and Egypt.

The two factions have been at odds since Hamas, which won parliamentary elections in 2006, ousted forces loyal to Mahmoud Abbas and Fatah in Gaza during clashes in 2007 and set up a rival government.

Shortly after Wednesday’s reconciliation deal was announced, five people were injured in an Israeli air strike in northern Gaza, Palestinian medics said.

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