Warring Palestinian factions Fatah and Hamas Wednesday ended their four-year-old feud by striking a landmark Egyptian brokered deal, prompting angry reactions from Israel which described it as a “hardblow” for West Asia peace.

Palestinian president Mahmud Abbas and Hamas leader Khaled Meshaal reached the agreement in cairo which provides for the creation of a joint caretaker Palestinian government ahead of national elections next year.

Abbas said the Palestinians had decided to “turn the black page of division forever,” as he joined Meshaal and the leaders of other Palestinian factions in finalising the long-awaited agreement inked Tuesday.

“We are certain of success so long as we’re united … Reconciliation clears the way not only to putting the Palestinian house in order but also to a just peace,” he added.

The Palestinian agreement prompted angry reactions from Israel, with Prime Minister Benjamin Netanyahu telling Tony Blair in London that “the agreement between the Palestinian Authority and Hamas is a hard blow to the peace process.”

Blair is the West Asia envoy for the diplomatic Quartet of the United Nations, the United States, the European Union and Russia.

“How is it possible to achieve peace with a government, half of which calls for the destruction of the State of Israel and even praises the arch-murderer Osama Bin Laden,” Netnyahu said. But at the same time it leaves key issues unresolved, such as who will control the Palestinian security forces, and makes no mention of relations with Israel.

Palestinians in both the Fatah ruled West Bank and Hamas ruled Gaza Strip, welcomed the agreement that aims to put an end to the rivalry between the administrations in both the territories, and restores the unity shattered by deadly infighting in June 2007.

Abbas said the Israel must now “choose between (building) settlements and peace,” and accused the Jewish state of opposing the Palestinian reconciliation accord as “a pretext to avoid peace negotiations.”

The west backed Palestinian Authority president Abbas has refused to resume peace talks with Israel until it stops settlement construction on occupied territory which the Palestinians want for their promised state.

The agreement between the two factions places no requirement on Hamas to amend its charter to acknowledge the Jewish state’s right to exist, but Meshaal said that his group would work for a Palestinian state in the West Bank and Gaza.

Meshaal said Hamas sought “the establishment of an independent sovereign Palestinian state on the West Bank and the Gaza Strip, with Jerusalem as its capital and without giving up an inch nor the right of return.”