The Palestinian factions Hamas and Fatah have agreed to form a unity government and end fighting that has claimed the lives of more than 100 people since December. VOA's Jim Teeple reports from Jerusalem it is unclear if the agreement will satisfy international donors who say any new government must recognize Israel.

From left: Mahmoud Abbas, Saudi King Abdullah and Hamas leader Khaled Mashaal

Speaking at the signing ceremony hosted by Saudi King Abdullah, Khaled Meshaal, the Damascus-based Hamas leader said all Palestinian factions would honor the agreement.

Meshaal says it is time for an immediate end to Palestinian factional fighting and violence. The Hamas leader also called on the international community to recognize the new government.

However the agreement does not specifically address three demands made by the U.S., Israel and the European Union for recognition, and a resumption of donor assistance to the Palestinian Authority - recognition of Israel, a renunciation of violence, and respect for previous peace agreements signed between Israel and the Fatah-led Palestine Liberation Organization.

A spokeswoman for Israel's Prime Minister Ehud Olmert said following the signing ceremony that any new government must meet those conditions if it expects to gain international acceptance.

A letter presented at the ceremony from Fatah leader and Palestinian President Mahmoud Abbas outlined aspects of the new government, saying it will abide by international law and previous agreements between Israel and the PLO. The letter also says the new government will follow guidelines published last year by Palestinian prisoners who outlined a peace plan with Israel based on Israel's 1967 borders.

Mr. Abbas, who recently threatened to call new elections if unity government talks failed, says the agreement will be welcomed by Palestinians tired of incessant violence.

He says the agreement is the beginning of a march to peace for Palestinians.

Both Fatah and Hamas have agreed to accept a new cabinet made up largely of technocrats. The key post of Interior Minister - responsible for the oversight of most Palestinian security forces - will go to an independent acceptable to both factions.

News of the agreement was greeted with celebratory gunfire in the West Bank and Gaza Strip. Under the agreement the new government is expected to be installed within five weeks.