GAZA (Reuters) - The Islamist group Hamas began ceding control of the Gaza Strip’s border crossings with Israel and Egypt to U.S.-backed Palestinian President Mahmoud Abbas on Wednesday under an agreement brokered by Cairo to end a decade of internal schism.

The move marked the most concrete implementation of the Oct. 11 reconciliation deal that Palestinians hope will ease economic restrictions on Gaza and enable more fruitful negotiations on their goal of setting up an independent state.

Palestinian Prime Minister Rami Al-Hamdallah said in a statement that taking charge of the crossings would help Abbas’s Palestinian Authority (PA) fulfill its duty “to improve the living conditions of our people”.

Israel and the United States have reservations about the intra-Palestinian pact, however, given refusals by Hamas - which has fought three wars with Israel since seizing control of Gaza in 2007 from forces loyal to Abbas - to relinquish its rockets and other arms.

Witnesses said PA employees moved into Erez and Kerem Shalom crossings on the Israeli border and Rafah crossing on the Egyptian border, as Hamas counterparts packed up equipment and departed on trucks.

“We have handed over the crossings with honesty and responsibility, without bargaining and unconditionally,” Hamas leader Ismail Haniyeh said in a video address.

Citing security concerns, Israel maintains tight restrictions on the movement of people and goods at its crossings with the Gaza Strip, including an almost blanket ban on exports from the territory.

Slideshow ( 12 images )

COGAT, the Israeli military-run authority that supervises Erez and Kerem Shalom, said a meeting would be held with a PA representative to define joint working protocols and Israeli security conditions, including “the complete absence of any Hamas member or representative” at or near the crossings.

Egypt, which in the past has accused Hamas of aiding an Islamist insurgency in its Sinai peninsula bordering Gaza, has kept Rafah largely closed. Hamas denies the allegations and has stepped up security along the frontier.

U.N. OFFICIAL HAILS CROSSINGS’ TRANSFER

Nickolay Mladenov, U.N. special Coordinator for the Middle East peace process, said transfer of the crossings was a “landmark development” in the reconciliation process, and he called in a statement for “the positive momentum to be maintained”.

PA ministers have begun gradually to assume their duties in Gaza in past weeks and on Tuesday took over the revenue accounts of the Rafah and Kerem Shalom crossings, officials said.

Hamas had used those revenues - taxes and fees collected from merchants and passengers - as part of its Gaza budget, to pay salaries of the 40,000 to 50,000 employees it has hired since 2007. Those wages will now be paid by the PA, under the Cairo agreement.

Hamas also maintains an armed wing, which analysts say has at least 25,000 well-equipped fighters. It remains the dominant force in Gaza, an enclave of two million people.

The Palestinian Authority will begin operating the Erez and Kerem Shalom crossings immediately, officials said, while in Rafah the operation will await further security arrangements such as deploying a force from Abbas’s presidential guards and Cairo completing innovations on its side of the facility.