The main Palestinian political rivals today took a major step toward healing their bitter rift, agreeing that Palestinian President Mahmoud Abbas would head an interim unity government to prepare for general elections in the West Bank and Gaza Strip.

Abbas and Khaled Mashaal, head of the Islamic militant Hamas, said they would move forward without delay, though it appears unlikely elections can be held in May, as initially envisioned.

Monday's agreement, brokered by Qatar, seemed to bring reconciliation within reach for the first time since the rivals established separate governments, following Hamas' violent takeover of Gaza in 2007.

Previous deals have collapsed amid deep suspicions and intervention by the sides' rival foreign patrons. Abbas is backed by the West while Hamas has been supported by Iran.
Abbas and Mashaal had reached a reconciliation deal last year, but disagreement over who was to head an interim government had delayed implementation. Hamas strongly opposed Abbas' choice of Salam Fayyad, the head of his Palestinian Authority in the West Bank.

It remains unclear whether an Abbas-led interim government that is supported by Hamas would be acceptable to the West, which gives hundreds of millions of dollars of aid to the Palestinians each year.

The United States, Europe and Israel consider Hamas a terror organisation, and said they would shun any government that includes members of an unreformed Hamas.

Abbas has international backing and Monday's agreement said all Cabinet ministers would be politically independent technocrats. Fayyad, who would have to step down if a transitional government is formed, said he welcomed the agreement. It was not announced when the caretaker government would take office.