Palestinian leader Mahmoud Abbas and Hamas chief Khaled Meshaal held talks on Thursday in a bid to reach an agreement on national unity. They confirmed a May election but have yet to resolve other key issues.

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REUTERS - Leaders of Fatah and Hamas met for the first time in six months and hailed progress toward ending a rift that has led to separate governments in the West Bank and Gaza, but there was no sign of a breakthrough.

The last meeting between President Mahmoud Abbas and Hamas leader Khaled Meshaal in Cairo in May yielded an agreement aimed at reuniting the Palestinian territories under a single government that would oversee new elections set for May 2012. There has been no progress towards implementation since then.

Hamas defeated Fatah in a 2006 parliamentary election and has run the Gaza Strip since 2007, when it seized control of the territory from the Abbas administration.

Since then, the Iran- and Syria-backed group has built its own government and security forces, complicating any attempt to reunite Gaza with the Western-backed Palestinian Authority.

Abbas, in comments carried by the Palestinian news agency WAFA, said after the Thursday talks there were “no differences between us now”. Meshaal, who lives in exile in Damascus, said: “We have opened in a new page of partnership.”

Azzam al-Ahmed, a senior Fatah official, said the leaders would hold another meeting to continue discussions.

Abbas wants the head of his Ramallah administration, the independent former World Bank economist Salam Fayyad, to stay on as prime minister. That choice is rejected by Hamas and there has been recent speculation Abbas is now willing to give way.

Elections

Fatah and Hamas representatives said there was agreement that elections should happen in May as agreed in the deal. But analysts doubt whether the vote will happen if the sides have not formed a government by then.

In a sign of some tangible progress, the sides announced that an all-encompassing Palestinian leadership body tasked with reforming the Palestine Liberation Organisation (PLO) would hold its first meeting on December 22. The body was first envisioned by a 2005 agreement among Palestinian factions.

The PLO, led by Abbas, was founded in 1964 and is recognised internationally as the legitimate representative of the Palestinian people.

Hamas is not currently part of the PLO, which is dominated by the Fatah movement. Hamas, which is shunned by the West for its hostility to Israel, believes that joining the PLO would bolster its international standing.

“It’s been a long wait but God willing it will finally happen,” said Izzat al-Rishq, a Hamas official, referring to the Dec. 22 meeting.

“This is the start of the participation of Hamas in the PLO,” said Hany al-Masri, a Palestinian political commentator based in Ramallah who has been involved in efforts to foster reconciliation. “It’s not the end of the road, but it’s a step.”

A spokesman for Prime Minister Benjamin Netanyahu said Palestinian unity moves were reducing the prospects for peace.

“The closer Abu Mazen gets to Hamas, the further he moves away from peace,” Netanyahu spokesman Mark Regev said.

Israel briefly withheld tax revenues collected on behalf of Abbas’s Palestinian Authority earlier this year in response to the unity agreement.

It took a similar step this month following the Palestinians’ successful bid to join the U.N. cultural agency UNESCO. Fayyad said on Thursday that the Palestinian Authority was “fast approaching the point of being completely incapacitated" by Israel's freeze on tax revenues.

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