Arab League Secretary General Amr Mussa has hailed the formation of a Palestinian national unity government and urged the international community to lift a year-old boycott.
Palestinian Prime Minister designate Ismail Haniyeh earlier announced that a cabinet, including both his Hamas party and the Fatah party led by Palestinian President Mahmoud Abbas, had been agreed upon.
It followed weeks of wrangling between Mr Abbas and Mr Haniyeh in Gaza.
Welcoming the move, Mr Mussa said it was an 'important step' towards ending political tensions in the region.
The Arab League chief called on the so-called Middle-East quartet and the international community to immediately lift the blockade that has been in place since Hamas came to power in elections last year.
The 'quartet' is the group of leading diplomatic players in the region which sponsors the Israeli-Palestinian process. It consists of the US, the UN, the EU and Russia.
Aid to the Palestinian Authority was cut following the Hamas election win, with the EU and US demanding that Hamas renounce violence and recognise Israel's right to exist.
Israel has been quick to dismiss the announcement of the cabinet and urged the international community to stand by its demands.
