Palestinian leaders made the announcement after seven years of disunity
Rival Palestinian factions Fatah and Hamas have announced a reconciliation deal, saying they will seek to form a unity government in the coming weeks.
It comes as peace talks between the Fatah party of Palestinian President Mahmoud Abbas and Israel face collapse.
Hamas and Fatah split violently in 2007. Previous reconciliation agreements were never implemented.
Israel's prime minister said Fatah had to choose between peace with Israel and peace with Hamas.
"He [Mr Abbas] has to choose," Israeli Prime Minister Benjamin Netanyahu said. "Does he want peace with Hamas or peace with Israel?
"You can have one but not the other. I hope he chooses peace; so far he hasn't done so."
Mr Abbas sent a delegation to Gaza for talks earlier this week.
'Good news'
The latest deal was announced at a news conference between Fatah and Hamas, an Islamist group banned as a terrorist organisation by Israel, the US and the EU.
They said they planned to form an interim unity government within five weeks and hold general elections within six months.
"This is the good news we tell our people," Hamas Prime Minister Ismail Haniyeh told reporters. "The era of division is over."
Shortly after the deal was announced, Israel launched an air strike in northern Gaza that wounded four people. It came two days after Gaza militants launched rockets into southern Israel.
The split between the two factions came about after Hamas won legislative elections in 2006, prompting an international outcry that saw the imposition of sanctions and the freezing of aid.
Prolonged fighting in the Gaza Strip in 2007 left dozens dead. In June 2007, Hamas ousted forces loyal to Mr Abbas and he dissolved the government.
Fatah has stayed in control of the Palestinian Authority, which rules in the West Bank, and Hamas has remained the power in Gaza.
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"Does [Abbas] want peace with Hamas or peace with Israel? You can have one but not the other”
Benjamin NetanyahuIsraeli Prime Minister
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