Palestinian President Mahmoud Abbas and Prime Minister Ismail Haniyeh have agreed to form a government of national unity.
It will replace the Hamas-led administration of the past six months.
The unity government will comprise both the Islamist militant group, Hamas and Mr Abbas's Fatah movement.
The international community has imposed sanctions against Hamas because it refused to recognise Israel since taking office six months ago.
A Hamas spokesman has again reiterated the group's refusal to acknowledge Israel as a state.