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Palestinian President Mahmoud Abbas and the ruling Islamic Resistance Movement (Hamas) reached a long-awaited deal Monday on a national coalition government.

"We're happy to inform the Palestinian people that the efforts on the political program of the national unity government have ended," Abbas was quoted by Palestinian official news agency (Wafa) as saying.

Abbas made the announcement following a meeting with Palestinian Prime Minister Ismail Haneya in Gaza City which was their second round of discussions in a 24 hour period. Haneya, also a senior leader of the ruling Hamas movement, has confirmed a deal was reached.

According to the agreement the incumbent Hamas-led government will be dissolved and replaced with a coalition consisting of at least Hamas and Abbas' Fatah. They're the two biggest Palestinian factions.

Haneya, as the incumbent prime minister, will remain in post to lead the new national unity coalition government.

So now the Hamas-led government rule of the Palestinian territories is over after a difficult six months during which the fledgling party was plagued by a series of internal and external difficulties. 

Domestically, the Palestinian territories have witnessed Israeli offensives since June 28, three days after three Palestinian militant groups including the armed wing of Hamas abducted an Israeli soldier in a cross-border raid on June 25.

In retaliation against Hamas and the government it leads Israel launched a military offensive in the Palestinian territories, especially around the Gaza Strip, and an 'arrest campaign' in the West Bank region.

Israel also tightened their siege like grip on the Palestinian territories and pushed them into a serious shortage of supplies. 

During the Israeli operations more than 220 Palestinians were killed and a number of Hamas lawmakers and ministers were detained by Israeli forces.

"The formation of the Hamas government was associated with many unhappy events," said police officer Ahmed al-Massri. Because of the difficulties he's not received his full salary for six months. 

Since Hamas took power in late March the government has been facing serious financial problems due to aid being cut off by the United States and the European Union (EU). They were the main donors to the Palestinian government.

The Hamas-led government could not pay the 165,000 government employees for months and this resulted in widespread strikes at all levels. 

The situation deteriorated further when Hamas rejected the donor countries' demand that they recognize Israel, signed international agreements and condemned violence.

Regionally, Hamas and its government did not recognize the Arab Peace Initiative adopted by all Arab countries at the 2002 Arab League's summit in Beirut. Consequently, Arab nations and in particular Jordan and Egypt, were not satisfied with the Hamas administration.

In a bid to overcome the crisis leaders of Palestinian factions jailed in Israeli prisons drew up a document of National Accordance calling for Palestinian statehood alongside Israel and a coalition government.

Since the release of the Prisoners' Document in mid May, Hamas and all the Palestinian factions have been in talks with the hope of adopting the document as a basis for a coalition government.

After three months of fruitless talks, Abbas eventually announced the deal in a last-minute move.

As Fatah decided to join the coalition government their spokesman Jamal Nazzal called on the international community to, "recognize the Palestinian coalition government, resume aid for the Palestinian people and remove Hamas from the terror organization's list."

Meanwhile, the Popular Front for the Liberation of Palestine (PFLP) also expressed its willingness to participate in the coalition government. PFLP politburo member Jamil Majdalawy said, "If the principles of pluralism were achieved and a democratic, political life is secured, we'll look positively to join the coalition."

However, Hamas spokesman in Gaza, Sami Abu Zuhri still voiced his group's rejection of three demands set by the US and the EU, saying that "We Hamas strongly support the formation of a national coalition government but we don't accept the three international requirements that ask us to recognize the state of Israel."

"Hamas will never recognize Israel until it ends its occupation of east Jerusalem, the West Bank and the Gaza Strip," the spokesman said. 

The tough stance of Hamas on Israel may shatter the deal between Abbas and Haneya in the future because one of Abbas' conditions of forming a national coalition government is that Hamas must recognize the Arab peace initiative which recognizes the state of Israel.

(Xinhua News Agency September 12, 2006)