Palestinian President Mahmoud Abbas on Monday took a decisive step toward reconciliation with the Islamic militant Hamas, agreeing to head an interim unity government that would prepare for elections in the West Bank and Gaza Strip.
The announcement immediately threw Mideast peace efforts into turmoil. By moving closer to Hamas, the Palestinian leader appeared to be closing the door, for now, to any possibility of peace talks with Israel _ although all such efforts have failed to get off the ground during Israeli Prime Minister Benjamin Netanyahu's three years in office.
Netanyahu condemned Monday's deal, saying it would be impossible to reach peace with a government that includes Hamas, which Israel and the West consider a terrorist group.
"It is either peace with Hamas or peace with Israel. You can't have them both," Netanyahu said.
A new attempt to restart low-level talks last month ended without a breakthrough. With the reconciliation deal, Abbas appears to have concluded that he has a better chance of repairing the Palestinians' internal troubles than of reaching an agreement with the hardline Israeli leader.
The Palestinians have been divided between rival governments since Hamas ousted forces loyal to Abbas from Gaza in 2007.
Monday's agreement, brokered by Qatar, seemed to bring reconciliation within reach for the first time. 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 Hamas chief Khaled Mashaal said they would move forward without delay, though it appears unlikely elections can be held in May, as initially envisioned.
The two Palestinian leaders 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 and Europe have said they would shun any government that includes members of an unreformed Hamas.
Still, Abbas has international backing and Monday's agreement said all Cabinet ministers would be politically independent technocrats. Western support would likely depend on whether Abbas, as prime minister of the interim government, can impose his internationally backed political platform and whether Hamas will agree to stay in the background.
The European Union offered qualified support Monday, saying it considered Palestinian reconciliation and elections as important steps toward an eventual Israeli-Palestinian peace deal.
The EU, one of the major financial backers of the Palestinian Authority, "looks forward to continuing its support," provided the new Palestinian government is committed to nonviolence, recognizes Israel and supports a negotiated solution to the Mideast conflict, said Michael Mann, a spokesman for EU foreign policy chief Catherine Ashton.
Abbas backs those requirements, while Hamas rejects them.
Monday's breakthrough came after two days of meetings between Abbas and Mashaal, hosted by Qatar's emir, Hamad bin Khalifa Al Thani. The two Palestinian leaders signed the agreement in a small ceremony in Doha.
"We promise our people to implement this agreement as soon as possible," Abbas said after the signing.
"We inform our people that we are serious about healing the wounds ... to reunite our people on the foundation of a political partnership, in order to devote our effort to resisting the (Israeli) occupation," added Mashaal.
The agreement also calls for rebuilding Gaza, which has been largely cut off from the world as part of an Israeli-Egyptian border blockade, imposed after the Hamas takeover in 2007.
The blockade was eased in the past year, but not enough to revive the Gazan economy, including the vital construction industry, and many large-scale projects remain on hold.
Qatar's leader urged the Arab world to stand behind the Palestinians' "historical rights," in an apparent reference for full statehood and return of lands occupied by Israel in the 1967 war.
Arab nations may have to step in if the West refuses to work with an Abbas-led interim government. The Palestinian Authority currently receives about $1 billion a year for its budget in foreign aid, and that money could be halted if the international community deems a new Palestinian government unacceptable.
Abbas and Hamas have had bitter ideological differences, with Abbas pursuing a deal with Israel on the terms of Palestinian statehood and the violently anti-Israel Hamas dismissing such talks as a waste of time.
In recent months, those differences seem to have narrowed. Abbas has lost faith in reaching a deal, at least with the current hardline Israeli government, while Mashaal has been prodding Hamas toward a more pragmatic stance that is closer to that of the group's parent movement, the pan-Arab Muslim Brotherhood.
However, Mashaal represents Hamas in exile and appears to have had differences with the movement's local leadership in Gaza.
Some of the Gaza leaders have resisted his push for reconciliation with Abbas and moving closer to the Brotherhood, Hamas officials have said privately. Still, Hamas' prime minister in Gaza, Ismail Haniyeh, welcomed the Doha deal, and a delegation from Gaza was present during Monday's signing.
Analysts said they believed this deal stood a chance where others had failed.
"There are several indications that this agreement is a serious one, and can be implemented," said Majid Sweilim, a political analyst in the West Bank. "The president at the helm of the government means it will be accepted by the West. The Qatari sponsorship means it's accepted by the West and will be funded by this wealthy Gulf state."
"President Abbas is very interested in ending the split, particularly with the failure of the peace talks, and Khaled Mashaal is getting closer to the PLO position, in harmony with the changes of the Muslim Brotherhoods in the region," Sweilim added.
Associated Press writer Ibrahim Barzak in Gaza City contributed reporting.