CAIRO, Feb 26: Rival Palestinian groups agreed on Thursday to set up a unity government by the end of March after reconciliation talks aimed at ending long-running factional feuding, Palestinian officials said.

The agreement, which could lead to the creation of a Palestinian government acceptable to the international community, was announced by officials from two Palestinian factions involved in the Cairo-sponsored dialogue.

Jamil Al Majdalawi, an official with the leftist Popular Front for the Liberation of Palestine, said the factions had formed several committees that would pave the way for the unity government. “The committees will end their work and a Palestinian unity government will be formed by the end of March,” he said.

His comments were confirmed by Mohammed Al Hindi, deputy leader of the Palestinian Islamic Jihad.

The reconciliation talks opened after the main groups Fatah and Hamas agreed on confidence-building measures to resolve the fate of prisoners detained by both sides and stop a war of words being played out in the media.

The stakes are high as billions of dollars of funds to rebuild the Gaza Strip after Israel’s war on the territory may be available if terms set by international donors can be met before an aid meeting next week in Egypt.

“We have no option before us but to succeed, and that will not be difficult,” Egyptian intelligence chief Omar Suleiman, who is mediating the talks grouping about a dozen Palestinian factions, said.

Fatah and Hamas have long been rivals but their feuding came to a head in June 2007 when the Islamists seized control of Gaza, routing forces loyal to Palestinian President Mahmud Abbas after days of deadly street battles.—AFP