Israeli forces massed near Gaza for a threatened large-scale offensive despite an apparent historic accord today that included Hamas implicitly agreeing to recognise Israel for the first time.
While Israeli forces massed in northern Gaza, and armed Palestinians on the other side of the border blocked roads with makeshift barriers and primed explosives, the two major political forces in the Palestinian territories agreed a manifesto for government.
Palestinian President Mahmoud Abbas
Palestinian President Mahmoud Abbas, of Fatah, and Prime Minister Ismail Haniyeh, agreed on a document drawn up by Palestinian prisoners in Israeli jails, it was announced today.
The manifesto implicitly recognises Israel, but the phrasing appears to leave Hamas wriggle room on an issue that has effectively acted as a veto on all attempts to resolve the Middle East conflict.
Hamas has denied the deal means that they accept accepts Israel's right to exist
The Islamist hard-liners said there were amendments made to the original manifesto which allow it to maintain its "agenda of resistance" to Israel.
"The document included a clear clause referring to the non-recognition of the legitimacy of the occupation," said Hamas spokesman Sami Abu Zuhri.
Officials close to the negotiations said Mr Abbas had accepted a Palestinian state in the West Bank and Gaza Strip - the so-called two-state solution which implicitly recognises the existence of Israeli borders.
But Hamas legislator Salah al-Bardaweel said: "We said we accept a state [in territory occupied] in 1967 - but we did not say we accept two states."
But a senior aide to Mr Abbas said the agreement clearly meant Hamas accepted Israel.
Yasser Abed Rabbo accused Hamas of "playing with words in order to save face".
But with Israel preparing for an offensive in Gaza following the kidnapping of an Israeli soldier at the weekend, there appeared to be little chance the agreement could open a path towards peacemaking soon.
Officials close to the negotiations, which have dragged on for weeks, said Mr Abbas and Mr Haniyeh agreed to accept a Palestinian state in the West Bank and Gaza Strip.
A two-state solution is in line with Fatah's recognition of Israel. But officials said the agreement stipulated that moves towards statehood, including Arab and international peace initiatives must serve Palestinian interests.
That could allow Hamas to reject, on those grounds, any accommodation with Israel, or recognition of the Jewish state.
The deal also appeared likely to lead to the cancellation of a July 26th referendum Mr Abbas scheduled over Hamas's objections to the prisoners' document.
Under the accord, Hamas, leading the Palestinian government on its own after an election victory in January, would agree to form a unity administration with Fatah and other factions.
Hamas had insisted it would head any governing coalition, but it was not immediately clear if it won the point in the agreement.
Mr Abbas has sought to soften Hamas's hard line towards Israel - the Islamist group's charter calls for the destruction of the Jewish state - in the hope of ending sanctions by Western donors that have limited the aid sent to the impoverished Palestinians.
Israel has called the manifesto an internal Palestinian matter and has said it would have no dealings with Hamas until the group recognised its existence, renounced violence and accepted past interim peace deals.
Islamic Jihad, another militant group, said it still rejected several points in the prisoners' document, including the concept of a Palestinian state limited to the West Bank and Gaza, land Israel occupied in the 1967 Middle East war.
Some Palestinian sources said the tense security situation, with Israeli massing on Gaza's border, had pushed the factions to intensify their efforts to reach a political agreement.
The Israelis began manoeuvres yesterday after Corporal Gilad Shalit (19) was captured in an incursion by Palestinian militants into Israel. Two Israeli soldiers were killed and another seriously was injured when the raiders crossed the border in a secret tunnel.
Israeli Prime Minister Ehud Olmert has ruled out any release of Palestinian prisoners in exchange for the kidnapped soldier.
He said yesterday the army was prepared for "a prolonged and extensive military operation in order to strike the terror organisations and commanders".
However, Mr Olmert insisted today the offensive would not interfere with plans for a withdrawal from the West Bank.
He said the decision to withdraw from Gaza this year after 38 years of occupation.
"I have not backed down or changed my mind about the enormous historical importance of the disengagement plan," Mr Olmert told the Knesset amid heckling from ultra-nationalist members.
Agencies