GAZA CITY, Gaza Strip — Ahmad Abu Harb, a young Palestinian commander in Hamas’s artillery brigade, was about to propose to his sweetheart when a gunman from the rival Fatah faction shot him in the head near his home in a Gaza refugee camp.

The killing was one of hundreds during clashes between Hamas, the Islamist group, and Fatah, the faction loyal to President Mahmoud Abbas of the Palestinian Authority, for control of the Gaza Strip in June 2007. Hamas ultimately routed Fatah and seized full control of Gaza, the Palestinian coastal enclave of about two million people.

Now, a decade later, families of victims on both sides of the conflict have begun receiving compensation payments of about $50,000 each from a new reconciliation program organized by the former chief of Fatah’s security force in Gaza, Muhammad Dahlan.

The program, which aims to heal the wounds between the factions in Gaza, also represents a bold gambit to return to Palestinian politics by Mr. Dahlan, who has been living in exile and has long been unwelcome in the Palestinian territories.