The Palestinian factions have reconciled in the hopes of establishing an independent state, they said in a press conference on Wednesday. Fatah Central Committee Member and chief negotiator Azzam al-Ahmed said, "The agreement is the beginning and we shall take quick steps to end the occupation and establish an independent Palestinian state."

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Al-Ahmed said that the Palestinian people have waited for the agreement for many years, adding that the prays

of Palestinian youth have been answered.

He accused Israel of using the division to "shirk its international responsibilities" and added that the US also abandoned its responsibility for ending "the longest occupation in history."

"We as Palestinians have learned a hard lesson for the past three years in our struggle against the occupation. The occupation exploited the division to judaise Jerusalem, complete the fence and seize lands in the West Bank," al-Ahmed said. "We felt a need to end the division to end the occupation."

The Fatah official stated that Israel had warned Palestinian President Mahmoud Abbas of the consequences of such an agreement. "When Abu Mazen (Abbas) presented his initiative, Netanyahu warned him, but Abu Mazen answered him from Moscow – Hamas comes first. Hamas is part of Palestinian life – it is the forefront of the struggle. Our unity is our best weapon against the occupation."

Hamas' deputy politburo chief Moussa Abu Marzouk announced during the press conference of the coming of a "new age" and said that all Palestinian factions will meet over the weekend to sign the agreement.

"This is not the end of the dialogue," he said. "After all the factions sign the understandings with Fatah and Hamas we shall form a new government and embark on a new era in the Palestinian struggle – in order to obtain our rights and preserve the Palestinian people's national rights."

'Peace with Israel not on our agenda'

Mahmoud al-Zahar, a senior Hamas leader who participated in the talks said that peace with Israel was not on the table. "Our program does not include negotiations with Israel or recognizing it," Zahhar said in Cairo. "It will not be possible for the interim national government to participate or bet on or work on the peace process with Israel."

Palestinian Prime Minister Salam Fayyad welcomed the agreement in a message posted on his Facebook page. Fayyad said that the deal is a vital step towards unity and would lead to the establishment of an independent Palestinian state on 1967 borders with Jerusalem as capital.

Turkish Foreign Minister Ahmet Davutoglu congratulated Abbas on reaching the agreement.

Hamas Prime Minister Ismail Haniyeh received similar messages from Egypt's Muslim Brotherhood leader Mohammed Badia. Khalil Assaf, independent Palestinian figures assembly representative in the West Bank, said the agreement was "the most important thing to happen to the Palestinians in 2011."

Earlier on Wednesday, Hamas official Mahmoud al-Zahar revealed additional details of the historic pact, including the release of political prisoners and the establishment of a joint security higher committee.

Following the announcement on the unity pact, Palestinians residents across the West Bank and Gaza Strip went out on the streets to celebrate the dramatic reconciliation between the longtime foes.

"It is a positive step for our national unity," said Gaza resident Yusuf Lafy, adding, "It brings us one step closer to liberating our occupied territories, because it will garner international legitimacy."

Cool response from Washington

The United States reacted coolly on Wednesday to the reconciliation annoucement, calling Hamas a "terrorist" group and saying any Palestinian government must renounce violence.

"The United States supports Palestinian reconciliation on terms which promote the cause of peace. Hamas, however, is a terrorist organization which targets civilians," White House spokesman Tommy Vietor said in a statement.

"To play a constructive role in achieving peace, any Palestinian government must accept the Quartet principles and renounce violence, abide by past agreements, and recognize Israel's right to exist," he said.

Spokespersons for the White House and the State Department said that they were seeking more information about the reported deal between the two groups.

Reuters and Roi Kais contributed to this report