The two main Palestinian factions, Fatah and Hamas, announced yesterday that they were putting aside years of bitter rivalry to create an interim unity government and hold elections within a year, a surprise move that promised to reshape the diplomatic landscape of the Middle East.

The deal, brokered in secret talks by the caretaker Egyptian government, was announced at a news conference in Cairo where the two negotiators referred to each side as brothers and declared a new chapter in the Palestinian struggle for independence, hobbled in recent years by the split between the Fatah-run West Bank and Hamas-run Gaza.

It was the first tangible sign that the upheaval across the Arab world, especially the Egyptian revolution, was having an effect on the Palestinians, who have been losing faith in US-sponsored peace negotiations with Israel and seem now to be turning more to fellow Arabs. But the years of bitterness will not be easily overcome, and both sides warned of potential obstacles ahead.

Israel, feeling increasingly surrounded by unfriendly forces, denounced the unity deal as dooming future peace talks since Hamas seeks its destruction.

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