This new proposal, drafted by Egypt, has raised hopes of a settlement of the internal Palestinian conflict which began with Hamas's victory in the elections of 2006. A four-page plan proposes that Mahmoud Abbas, the Fatah leader, joins Hamas in a "consensus government".

Hamas seized control of the Gaza Strip in June 2007 and has endured isolation and economic sanctions ever since. Ahmed Yousef, a Hamas political adviser, said the movement may look favourably on the Egyptian plan. "They have said maybe they have reservations regarding some of the details, but in general it has been accepted. The people have said it's a good basis to start with. I do believe this time is different from other times. This time it's going to be serious," said Mr Yousef.

Talks between Fatah and Hamas, mediated by Egypt, have continued for months. This is the first tangible sign of progress.

The negotiations have been spurred on by a growing dispute over when Mr Abbas's term as President of the Palestinian Authority comes to an end. His original four-year mandate expires in January.

But Fatah wants the next presidential election to coincide with the parliamentary polls due in January 2010. The Egyptian proposal includes reforming the Palestinian security services, now divided between the factions, and forming a new transitional government, with simultaneous elections for the presidency and parliament. Thirteen Palestinian factions, including Hamas and Fatah, will meet in Cairo on Nov 9 to discuss the plan.

Any transitional government would probably have the support of Arab and Western countries. "We are hoping everything will lead to putting an end to the divide between Gaza and the West Bank," said a Palestinian political adviser.