Hamas and Fatah say agree on Palestinian national unity government.

Hamas and Fatah say agree on Palestinian national unity government. (Taz).

Rival Palestinian factions Fatah and Hamas agreed on the make-up of a national unity government on Tuesday, officials from both parties said, in the most significant step yet toward healing their seven-year rift, Reuters reported.

The groups decided on a list of independent, technocrat ministers who will run government pending national polls in at least six months - moves they hope will revive institutions paralyzed since the parties fought a brief civil war in 2007.

Officials from the parties told a news conference in the Gaza Strip that Palestinian President Mahmoud Abbas will make a formal announcement of the new government later this week after choosing a religious affairs minister.

Israel objects to the reconciliation moves and regards Hamas, which refuses to recognize Israel or renounce arms, as a terrorist group. It has threatened financial sanctions against Abbas's Western-backed administration in the occupied West Bank if the unity government goes ahead.