An agreement reached on Thursday in Cairo stipulates that the unity government, run by Palestinian President Mahmoud Abbas, will take immediate control of the Gaza Strip.

Hamas and Fatah had set up a unity government of independents in June, but it did not take hold. The Fatah movement of Abbas accused Hamas of running a parallel administration.

A ceasefire struck late last month following the July-August war between Israeli and Hamas forces included an agreement that the Palestinian Authority, led by Abbas, should take over civil administration in Gaza from Hamas.

But a salary dispute brought tensions between the rival factions to a near-breaking point. Hamas had accused the Palestinian Authority of not paying its 45,000 employees in Gaza.

But it appears this issue has now been solved.

"All civil servants will be paid by the unity government because they are all Palestinians and it is the government of all Palestinians," said Azzam Ahmed, Fatah's head of delegation.

Both Ahmed and senior Hamas official Abu Marzouk confirmed that an agreement had been reached.

The rival factions will now need to agree on a unified strategy ahead of talks with Israeli negotiators in October.

Both sides have agreed to negotiate on Palestinian demands to end an eight-year blockade of Gaza, as well as the exchange of prisoners currently in Israeli jails for the remains of Israeli soldiers killed in Gaza.

jr/mg (AFP, Reuters)