Palestinian Authority Chairman Mahmoud Abbas and Prime Minister Ismail Haniyeh agreed Wednesday on the make-up of the new PA unity government, officials said, even as renewed factional violence wounded nine people in the northern Gaza Strip, including two children.

"We have finished all the issues relating to the formation of the government tonight, including the issue of the minister of interior," Haniyeh said after meeting with Abbas in Gaza. "Today is an occasion to celebrate."

A Hamas official named the new interior minister as Hani Al-Qawasmi, an academic with no known political affiliation. Mustafa Barghouti, the incoming information minister, confirmed the appointment.

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Barghouti said other key appointments included Salam Fayyad, an internationally respected economist, as finance minister, and Ziad Abu Amr, an independent lawmaker, as foreign minister. Haniyeh will remain as prime minister, and Azzam al-Ahmed, head of Fatah's parliament bloc, will be deputy prime minister.

The full cabinet line-up will be unveiled on Thursday, officials from both sides said, and will be submitted to parliament for approval on Saturday.

The agreement on the interior post, which oversees the security services, removed a key obstacle to forming a unity government.

Medical staff said that the nine wounded were being treated in hospital, they included three bystanders, three Hamas men and three from Fatah.

A local Fatah commander said the fighting was sparked after Hamas men had abducted a gunman aligned with their group during a shootout. He said that his men had taken four Hamas gunmen hostage and that Hamas was holding one of his men.

Abbas and Haniyeh met late Wednesday to wrap up final details, including who will hold the key position of interior minister, which oversees some security forces. In all, Hamas will get nine Cabinet posts and Fatah will get six.

Ahmed Bahar of Hamas, who serves as acting parliamentary speaker, said a special session would be convened on Saturday at 11 A.M. to discuss the unity government's political platform and hold a vote of confidence.

The decision by Abbas and Haniyeh capped months of stop-and-go coalition talks alternating with periods of bloodshed.

Israel has vowed to boycott the unity government, including non-Hamas ministers, unless it recognizes Israel, renounces violence and accepts interim peace deals as demanded by the Quartet of Middle East mediators.

The unity government agreement contains a vague promise to "respect" previous Israeli-Palestinian pacts. It does not commit the incoming government to abide by those pacts, nor to recognize Israel and renounce violence as demanded by Quartet partners the United States, the European Union, the United Nations and Russia.

Abbas and Haniyeh were under pressure to cut a deal quickly. Explosions overnight damaged or destroyed two houses in the Gaza Strip in renewed factional fighting.

Members of Hamas's Executive Force attacked a house with rocket propelled grenades near Gaza City, not far from where unidentified gunmen on Tuesday shot dead a member of the group's armed wing, local residents said.

Hamas blamed security forces loyal to Fatah for the killing of Ala al-Haddad, Gaza City commander of Hamas's armed wing, the Izz el-Deen al-Qassam Brigades. Fatah denied any responsibility.

In northern Gaza on Tuesday, a powerful bomb was detonated outside the house of a Fatah supporter, causing damage but no injuries.

Hamas official: Our ideological stance to change in near future
The ideological stance of the Islamic Hamas group will undergo changes in the near feature, an adviser to Palestinian Prime Minister Ismail Haniyeh was quoted as saying Wednesday in an interview published in the London-based Al-Sharak Al-Oust daily.

The adviser, Ahmed Yousef, also said that Saudi Arabia and other Arab states, including Egypt and Jordan, could influence the United States to change its own stance regarding the Palestinian unity government set to be formed in the near future.

Yousef also said that the goals of the organization were likely to come into fruition through political activity, but added that if that approach failed, the group was prepared to resume armed resistance.

"Hamas has announced that it would debate in a positive way" the 2002 Saudi Arabian peace initiative if Israel would obligate itself to it, something that has not happened.

He added that Hamas was prepared to agree to the creation of a Palestinian state along the 1967 borders, along with right of return for Palestinian refugees and release of prisoners, in exchange for a 10-year cease-fire agreement.

The Mecca agreement gives Hamas legitimacy in the eyes of Arab states, Yousef added, saying that the group would also request legitimacy from the international community.

Palestinians reject Israel's call for amending Arab peace plan
The Palestinians on Wednesday joined major Arab countries in saying
a 2002 Arab plan for peace with Israel should not be amended at an upcoming Arab summit in Saudi Arabia.

Israel has expressed interest in the peace plan, which calls for a full Israeli withdrawal from lands it occupied in the 1967 Six Day War, in exchange for recognition by the Arab world.

However, Foreign Minister Tzipi Livni said earlier this week that Israel would not accept the plan as is, and that any reference to Palestinian refugees should be dropped from it.

The plan is to be relaunched at the Arab summit, set for March 28-29, and leaders of Syria, Egypt and Saudi Arab said Tuesday it would not be changed.

On Wednesday, the Palestinians weighed in, adopting the Arab position. The Palestinian leadership rejects any changes to the Arab initiative, said Nabil Abu Rdeneh, an adviser to Palestinian Authority Chairman Mahmoud Abbas.

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