Palestinian political leaders say a deal on a unity government is imminent, and could be announced at any time. Meanwhile, a Palestinian suicide bomber attacked Israeli troops in the Gaza Strip, wounding one soldier.
Palestinian President Mahmoud Abbas held talks with senior Hamas leaders in the Gaza Strip late Monday. The negotiations are aimed at creating a unity government.
Efforts to create a unity government between the Hamas and Fatah political factions have been going on for months.
Until now, the efforts have gone nowhere, because Mr. Abbas - who heads the Fatah faction - has insisted that any new government accept commitments made by previous Palestinian governments, such as recognizing Israel, renouncing violence and accepting peace agreements signed by Israel and the Palestinians. These are issues that Hamas has refused to accept.
Hamas has controlled the Palestinian government since winning legislative elections in January.
Mustafa Barghouti, an independent member of the Palestinian legislature, who has been brokering talks between Hamas and Fatah, says the new government would include a wide cross section of Palestinian political leaders.
Barghouti says Palestinian Prime Minister Ismail Haniyeh - a leading Hamas militant - would be replaced as prime minister, but he gave no indication as to who the new prime minister might be.
Hamas leaders say they have agreed to a new prime minister, and will submit their choice to President Abbas.
Palestinians hope that a new unity government, not led by Hamas, will persuade international donors to resume aid, which has been frozen because of the Hamas refusal to recognize Israel.
A new government might make it possible for Israel to resume tax and customs transfers to the Palestinians, which have also been suspended, and which are vital for paying Palestinian government salaries.
Meanwhile, violence continues in the Gaza Strip. A female suicide bomber blew herself up near a group of Israeli troops in Beit Hanoun.
At least 50 Palestinians, most of them militants, have been killed in fighting around the town since last Wednesday, the heaviest fighting to occur in Gaza since Israel withdrew from the territory last year.