Israeli Prime Minister Benjamin Netanyahu has slammed a deal reached between rival Palestinian factions Fatah and Hamas to end a decade-long rift as "making peace much harder to achieve".

Negotiators for the West Bank's Fatah and militant Hamas, which controls the Gaza Strip, signed a preliminary agreement in Cairo on Thursday, a step hailed as the biggest step forward in intra-Palestinian relations in years.

The deal, reached after two days of Egyptian-brokered negotiations, should ensure a unity government will once again administer both the West Bank and Gaza after the rift caused by militant group Hamas’s takeover of the Gaza Strip in 2007.

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While it covers border crossing arrangements and the livelihoods of thousands of public servants, it is understood some key issues - including Hamas’ arsenal - are not addressed.

Opening the Rafah border with Egypt would significantly ease Gaza’s humanitarian crisis, allowing freedom of trade and movement for the coastal enclave's 1.8 million residents. Both sides agreed to European Union monitors at the crossing point in an attempt assuage Israeli fears over weapons smuggling.

Israel’s initial reaction to the news from Cairo was cautious. Any deal must comply with “international agreements” including recognising the state of Israel and disarming Hamas, a government statement said.

Gaza blackout Show all 10 1 /10 Gaza blackout Gaza blackout A Palestinian man works at his workshop as he fixes mobile power generators in Gaza City, July 9, 2017. REUTERS Gaza blackout Palestinians pray in a makeshift mosque lit by battery-powered lights during a power cut in Gaza City, July 18, 2017. REUTERS Gaza blackout A Palestinian vendor sells fruits and vegetables during a power cut in a makeshift shop lit by battery-powered light in Beit Lahiya town, in the northern Gaza Strip, July 13, 2017. REUTERS Gaza blackout A Palestinian woman is seen from the window of her kitchen as she uses a candle light to prepare food during a power cut in Beit Lahiya town, in the northern Gaza Strip, July 13, 2017. REUTERS Gaza blackout Buildings are seen at night in Gaza City, July 18, 2017. REUTERS Gaza blackout Buildings are seen at night during a power cut in Gaza City, July 18 REUTERS Gaza blackout A Palestinian woman washes dishes in her kitchen as she uses a candle light during a power cut in Beit Lahiya town, in the northern Gaza Strip, July 13, 2017. REUTERS Gaza blackout Members of a Palestinian family prepare food on a fire on a beach during a power cut in the northern Gaza Strip, July 12, 2017. REUTERS Gaza blackout Palestinians make food during a hot weather on a beach during a power cut in the northern Gaza Strip, July 12, 2017 REUTERS Gaza blackout A Palestinian woman holds her child as she walks out of her house lit by a torch during a power cut in Khan Younis, in the southern Gaza Strip, July 3, 2017. REUTERS

Mr Netanyahu's office, however, followed up on Twitter with comments reiterating its opposition to working with the Sunni militant organisation in its current form.

"There is nothing Israel wants more than peace with all our neighbours. Reconciliation between Fatah and Hamas makes peace much harder to achieve," said a statement posted by Ofir Gendelmen, the prime minister's Arab media spokesperson.

"Reconciling with mass-murderers is part of the problem, not part of the solution. Say yes to peace and no to joining hands with Hamas."

Hamas has slowly rebranding itself as a more moderate and pragmatist organisation in an effort to force the Fatah-led Palestinian Authority into reconciliation talks: earlier this year it unveiled an updated founding charter which accepted the borders of a Palestinian state within the pre-1967 boundaries for the first time.

The announced changes did little to convince Israeli officials that Hamas’s stance has changed. At the time, Mr Netanyahu's office said the group was just “attempting to fool the world” it had changed its terrorist stripes.

All previous Fatah-Hamas attempts to reconcile have quickly broken down.

The deal comes a month after Hamas dissolved the committee which runs the Gaza Strip and said it was willing to work towards a reconciliation with its West Bank rivals.