Hamas and Fatah, the two rival Palestinian political factions, are in talks about forming a unity government, with Hamas leader Khaled Meshal claiming long-stalled elections in the occupied territories are also being planned.
"We are forging ahead with the reconciliation. We are consulting about forming a government of national accord. Preparations for presidential, parliamentary and executive council elections are under way. We are reinvigorating the PLO [Palestine Liberation Organisation] and organising its meetings until a new national council and executive committee are elected," he told the BBC.
The Palestinian political picture has been fragmented since 2006 when Hamas won control of the Gaza Strip in elections. Violent, fratricidal fighting followed between the two parties, leaving Hamas in power in Gaza and Fatah, led by Mahmoud Abbas and which dominates the Palestinian National Authority, in control of the West Bank. Some Palestinian analysts suggest that were elections to be held today in the two Palestinian territories, that situation would be reversed. For at least two years, efforts to reconcile the factions have taken place. But in recent months, co-operation between them has increased substantially.
Hamas is considered a terrorist organisation by the United States, the EU, and Israel, with which it fought a week-long war last November.
One Western diplomatic source said of the supposed rapprochement: "They hate each other's guts and would obliterate each other given the chance, but ordinary Palestinians are fed up with the situation as it stands.
"Neither side will now want to get the blame for this latest reconciliation failing, so what I expect will happen is that there will be some sort of symbolic outcome, possibly a joint committee to work on prisoner releases [so] both sides will be able say that the seeds have been planted for peace."
There is hope that the recent election in Israel will force more parties that favour renewed dialogue with the Palestinians into the Israeli Government. That hope was renewed this week when Barack Obama announced a visit to the region next month, his first trip to Israel and the occupied territories as President.
Despite rumours that Meshal told Jordan's King Abdullah last month that he was prepared to accept some sort of two-state solution, there has been no indication that Hamas is preparing to recognise Israel - or Israel Hamas.