Palestinian factions gathered in Cairo on Tuesday signed a reconciliation deal that will pave the way for elections within a year, an AFP correspondent said.

Representatives of 13 factions, including President Mahmoud Abbas' Fatah party and its rival Hamas, as well as independent political figures inked the deal following talks with Egyptian officials.

A formal signing ceremony will be held on Wednesday, and will be attended by Hamas chief Khalid Mash'al and President Mahmoud Abbas.

"We signed the deal despite several reservations. But we insisted on working for the higher national interest," said Walid Al-Awad, a politburo member of the leftist Palestine People's Party.

"We have discussed all the reservations. Everyone has agreed to take these points into consideration," he told Egyptian state television without elaborating.

"Palestinians in the Gaza Strip and the West Bank will be celebrating this agreement... We must now work to implement what was agreed in the deal," he said.

Among the first tasks to be tackled is the formation of a government and the establishment of a higher security council tasked with examining ways to integrate Hamas and Fatah's rival security forces and create a "professional" security service.

The accord also calls for the creation of an electoral tribunal and for the release of a number prisoners held by the rival movements in jails in the West Bank and Gaza.

The deal largely maintains the status quo, leaving Hamas in control of the Gaza Strip and the Fatah-dominated Palestinian Authority ruling the West Bank.

The agreement will be based on a 2009 document mediated by Egypt, which Fatah officials have already signed. Sources say the document has not been modified. A second document, said to have been finalized in Damascus in the winter when the last unity talks took place, will act as a guideline for the implementation of the first document.

Officials have said that implementation will begin immediately upon signing, starting with the appointment of a transitional government.

The new government would maintain the current mechanisms for negotiations with Israel, though peace talks have been on hold for months now and do not look likely to resume in the near future.

New government

While Hamas leader Ismail Haniyeh announced he was willing to resign as soon as a transitional government was formed, it is unclear if caretaker PA Prime Minister Salam Fayyad will retain his role in the new body.

Speaking to journalists in Ramallah on Monday, Fayyad declined to answer questions around whether he would remain prime minister, saying it was for "Palestinian consensus" to determine.

He urged Palestinians to support the new government, and work to ensure its success.

Commenting on the nature of the new union, Fayyad said sides had already determined that violence should not be used as a means of struggle against Israel's occupation.