Palestinian President Mahmoud Abbas, in his first decree after joining a unity government with Hamas, appointed the Islamist group's long-time foe to oversee the divided security forces.
The appointment of Mohammad Dahlan, one of the most powerful Fatah leaders, as national security adviser elevated his official role in the chaotic security hierarchy at a time when both sides say they want to bring an end to factional fighting.
The swearing-in yesterday of a unity government pairing the rival Hamas and Fatah factions has not resolved differences over control of the security services.
Tensions remain high, particularly in the Gaza Strip. As the unity deal was being finalised last week, an intelligence officer loyal to Abbas's Fatah faction was shot dead by unidentified gunmen, a BBC correspondent was kidnapped and a UN relief convoy was attacked.
At the government's inaugural meeting today, officials said their goal was to quickly put an end to factional fighting that has killed more than 300 Palestinians in the past year.
"We know it is a difficult mission and it will not be easy, but it has been placed as a first priority for the unity government," Information Minister Mustafa al-Barghouthi said.
Top Abbas adviser Nabil Abu Rdainah said Abbas's decree reestablished an umbrella Palestinian National Security Council that will, in theory, oversee all of the security services. "All issues will be presented before the security council in order to determine solutions," Abu Rdainah said.
Palestinian officials and analysts say the fate of Hamas's Executive Force will be the most difficult issue to resolve.
Hamas says it is pushing ahead with plans to double the size of the contingent to 12,000 members. Fatah wants it dismantled. Dahlan said he would serve as the council's top adviser and secretary as well as "a back up to the minister of interior."
Abbas and Palestinian Prime Minister Ismail Haniyeh of Hamas settled on the appointment of Hani al-Qawasmi, an academic with no security experience, to serve as interior minister. But officials say Qawasmi is unlikely to wield much power.