A political agreement has been reached between the rival Palestinian factions Hamas and Fatah. However, Hamas, the ruling Islamist group, has denied earlier reports that the document means it now accepts Israel’s existence. Officials close to the Palestinian President’s Fatah movement insist that Hamas has agreed to recognise Israel, while Hamas officials deny that.

The group’s charter calls for the destruction of Israel and it has been under pressure to soften its stance. Observers say a concrete agreement between Hamas and Fatah is likely to lead to the cancellation of a referendum on the issue, planned for July 26. The latest deal came amid mounting pressure over a western aid embargo and Israel’s offensive in Gaza to try to free a captured soldier.

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