The two main Palestinian factions, Fatah and Hamas, announced Wednesday that they were putting aside years of bitter rivalry to create an interim unity government and hold elections within a year, a surprise move that promised to reshape the diplomatic landscape of the Middle East.

"It is time for the Palestinian people to reject the corrupt and useless leaders who have used violence and strife to insure their positions. It is also time for Israel to reject the extreme factions of their government."

The deal, brokered in secret talks by the caretaker Egyptian government, was announced at a news conference in Cairo where the two negotiators referred to each side as brothers and declared a new chapter in the Palestinian struggle for independence, hobbled in recent years by the split between the Fatah-run West Bank and Hamas-run Gaza.

It was the first tangible sign that the upheaval across the Arab world, especially the Egyptian revolution, was having an impact on the Palestinians, who have been losing faith in American-sponsored peace negotiations with Israel and seem now to be turning more to fellow Arabs. But the years of bitterness will not be easily overcome, and both sides warned of potential obstacles ahead.

Israel, feeling increasingly surrounded by unfriendly forces, denounced the unity deal as dooming future peace talks since Hamas seeks its destruction. “The Palestinian Authority has to choose between peace with Israel and peace with Hamas,” Prime Minister Benjamin Netanyahu declared in a televised statement. The Obama administration warned that Hamas was a terrorist organization unfit for peacemaking.

The deal brings with it the risk of alienating the Western support that the Palestinian Authority has enjoyed. Azzam al-Ahmad, the Fatah negotiator, said that Salam Fayyad, the prime minister in the West Bank who is despised by Hamas, would not be part of the interim government. It is partly because of Mr. Fayyad, and the trust he inspires in Washington, that hundreds of millions of dollars are provided annually to the Palestinian Authority by Congress. Without that aid, the Palestinian Authority would face great difficulties.

The announcement was sure to fuel a debate on whether Mr. Netanyahu had done enough in his two years in power to forge a deal with the Palestinian Authority led by President Mahmoud Abbas and Mr. Fayyad, widely considered the most moderate leaders the Palestinians have ever had.

The deal also highlighted Egypt’s evolving foreign policy, its increasing regional influence and the challenges that posed for Israel. The new Egyptian government pursued Palestinian negotiations aggressively; has recognized the Muslim Brotherhood, which has deep ties to Hamas; and is reconsidering a natural gas deal with Israel.

Relations between Fatah, the mainstream secularist movement led by Mr. Abbas, and Hamas, the Islamic militant group, have deteriorated since Hamas won parliamentary elections in 2006. They ruptured a year later when Hamas seized full control of Gaza, the coastal enclave, after a brief factional war, routing Fatah forces there and limiting the influence of Mr. Abbas and his Palestinian Authority to the West Bank.

A desire for unity has been one goal that ordinary Palestinians in both areas have consistently said they sought. Until now it has proved elusive and leaders of the two factions have spoken of each other in vicious terms and jailed each other’s activists.

But with the Palestinians seeking international recognition of statehood at the United Nations by September, Mr. Abbas has repeatedly said that unity must be restored for a credible case to be made. Other recent developments also played a role.

As Mr. Ahmad said after the news conference in Cairo: “The changes in the Arab region and the political upheaval contributed to reducing the pressure on the Palestinian factions, and by pressure I mean the negative kind of pressure.” He said that he was referring to “the changing rules of the game in the region.”

Mkhaimar Abusada, a professor of political science at Al-Azhar University in Gaza, said that the Palestinian Authority’s failure to reach an agreement with Israel and the anger following an American veto of a United Nations Security Council resolution against Israeli settlement construction in February encouraged Fatah to come to an agreement with Hamas. The Islamic group, he said, was motivated to get closer to Fatah by regional changes, especially the protests in Syria, where Hamas’s politburo is based. If President Bashar al-Assad of Syria were to fall, Hamas might no longer be able to use Syria as a base or enjoy the protection, money and arms the country has extended.

“We have ended a painful period in the history of the Palestinian people where Palestinian division had prevailed,” Moussa Abu Marzouk, a representative of Hamas who negotiated the deal, said at the Cairo news conference. “We gave the occupation a great opportunity to expand the settlements because of this division. Today we turn this page and open a new page.”

When he spoke at the news conference, Mr. Ahmad of Fatah recalled the chants of young Palestinian demonstrators mimicking the Tunisian and Egyptian chants: “The people want to bring down the regime.”

“To all the Palestinian youth who went out saying, ‘The people want to end the division’ and ‘The people want to end the occupation,’ we say what you demanded was achieved today,” he said, adding that the period of division had taught both sides “a hard lesson in confronting the occupation.”

He said that Israeli officials had warned Mr. Abbas not to collaborate with Hamas but that “he did not heed the warning, and he responded, ‘Yes, we want Hamas.’ ”

The Fatah-led Palestinian Authority has negotiated for a two-state solution with Israel, whereas Hamas says Israel has no right to exist and continues to fire rockets at Israeli towns.

The Palestinian negotiators offered few details of the proposed transitional unity government, saying that it would be composed of neutral professionals and that the leaders of each side would work out details. All the Palestinian factions are to meet next week to sign the agreement.

"It is time for the Palestinian people to reject the corrupt and useless leaders who have used violence and strife to insure their positions. It is also time for Israel to reject the extreme factions of their government."

Mahmoud al-Zahar, a Hamas leader, told Al Jazeera Television from Cairo the sides had agreed to changes in the interim leadership of the Palestine Liberation Organization, a tribunal for elections and a date for the elections. The P.L.O. excludes Hamas, which has long sought entry.

Hamas and Fatah will together nominate members of the technocratic government and a 12-judge election tribunal. He also said that an agreement was reached to set up an oversight committee to regulate security.

In November, officials from the two movements met in Damascus but failed to reach an agreement because of differences on security. It seemed likely that Fatah security forces, which work closely with the Israeli Army, would continue to rule in the West Bank, and that Hamas security would continue in Gaza with a tacit agreement not to arrest each other’s activists.

The last round of Israeli-Palestinian peace talks broke down soon after they started last September when an Israeli moratorium on construction in West Bank settlements expired. The international powers have been working to get the sides to resume negotiations, and Mr. Netanyahu has recently been considering making an offer to the Palestinian Authority to try to pre-empt a United Nations vote. He is due to address a joint session of Congress in a month.

But with this latest shift in Palestinian politics, Mr. Netanyahu may also shift tactics. “I think the very idea of the reconciliation shows the weakness of the Palestinian Authority, and leads one to wonder whether Hamas will take control over Judea and Samaria, as it did over Gaza,” he said in his statement, using the biblical names for the West Bank.

Earlier Wednesday, Mr. Netanyahu instructed the Israeli security establishment to take all necessary measures to ensure the enforcement of Israel’s naval blockade of Gaza amid reports of plans for another international flotilla. Mr. Netanyahu met with his senior ministers and security officials and said that diplomatic efforts should continue to prevent the flotilla from setting out.

Last May, Israeli naval commandos raided a flotilla trying to breach the blockade of Gaza and killed nine pro-Palestinian activists on a Turkish vessel after violence broke out. The episode stirred international outrage and caused a crisis in relations between Israel and Turkey.