Egypt gave Fatah and Hamas a further three weeks Tuesday to resolve their political divisions and end bickering marked by clashes and security crackdowns in Gaza and the West Bank.
The sides will leave Egypt and return for a final negotiating round on July 25, after it became clear they would miss the previous July 7 deadline set by Egypt.
"It was decided to give the two sides an additional chance and time to make progress on the ground, especially on the issue of political detainees, and make a real breakthrough that would help achieve national reconciliation," Hamas official Ezzat el-Rishiq, who is in Cairo, told Reuters.
Arrests and counter arrests by forces loyal to the two groups have hampered efforts to restore political unity and boost prospects for a resumption of peace-making with Israel.
Rishiq said if the two factions met the new deadline, leaders of all Palestinian groups would be invited by Cairo to sign a reconciliation deal at a ceremony on July 28.
A deal would aim to gradually end divisions by setting up a joint committee to handle the reconstruction of Gaza following the Israel Defense Forces' three-week offensive there in January. It would also prepare for presidential and parliamentary elections in Gaza and the West Bank, and reform Palestinian security services.
Earlier Tuesday the head of the Fatah parliamentary faction, Azzam al-Ahmed, reported progress in his party's reconciliation talks with rival Hamas, and said the two sides were set to announce the establishment of a joint security body for the Gaza Strip.
The new security agency will comprise some 3,000 members and operate in Gaza, where the militant Hamas seized power in June 2006, following days of bloody confrontations between the two groups.
The understanding was reached after a stormy week of discussions between Fatah and Hamas in Cairo, in which the two sides accused each other of harassment and of trying to thwart the discussions.
Fatah officials also accused Hamas of planning to assassinate several senior Palestinian Authority officials.
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