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The rival Palestinian factions Hamas and Fatah on Wednesday agreed to form a unity government and hold new elections, making a new attempt to overcome a seven-year split that has left them divided between two governments.

While the announcement was greeted with smiles and celebrations, it added new complications to U.S. efforts to broker a peace deal between Israel and the Palestinians.

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The announcement was made by Prime Minister Ismail Haniyeh, the head of the Hamas government in Gaza, and Azzam al-Ahmed of Fatah, an envoy of internationally backed Palestinian President Mahmoud Abbas.

Does he want peace with Hamas or peace with Israel?

Similar agreements were reached in principle in the past but never implemented. It was not clear how the new attempt announced Wednesday would succeed where previous ones failed, since the fundamental difficulties remain in place.

However, any agreement between Abbas and the Islamic militant Hamas was bound to add further complications to U.S. mediation efforts between Israel and the Palestinians.