A dozen Palestinian groups launched a long-awaited dialogue on Thursday and laid out a plan to tackle key issues that could reunite Palestinians after 18 months of schism between Gaza and the West Bank.

All parties say they hope the dialogue will lead to a new national unity government to oversee the reconstruction of Gaza after a three-week Israeli offensive and then to organise presidential and parliamentary elections. The participants agreed to form five committees to deal with issues such as the formation of the cabinet, presidential and legislative elections and security services.

"The atmosphere was positive," said Walid al-Awad, member of the political bureau of the communist People's Party. "The make-up of the committees has been agreed," he told Reuters.

He said the committees would begin their work on March 10 and finish before the end of the month. An Arab diplomat said on Wednesday the Egyptian mediators hoped to complete a deal in time for endorsement by an Arab summit in Qatar in late March.

Many Arabs and Palestinians criticised Western countries were punishing the Palestinians for their democratic choice.

Senior Fatah official Azzam al-Ahmed left open the question of what type of government would emerge.

"There is an agreement on a government of national unity," he told a news conference on Wednesday night. "The nature of this cabinet is up to the committee that will be formed."

Egyptian intelligence chief Omar Suleiman told the opening session of the dialogue: "(Egypt hopes) that this meeting is the real start of a new period ending the state of division which has gone on too long."

"The time has come for us to turn the page once and for all," he told the Palestinian delegates, who sat at a long table in a room at Egyptian intelligence headquarters.

Suleiman added: "Everyone is looking towards you ... and hanging their hopes on you. So do not prolong the disagreement and deepen the division. Unite ranks to fulfil the hopes of all for an independent Palestinian state."

The national dialogue was preceded by talks between Fatah and Hamas on Wednesday. The two groups exchanged promises to free each other's detainees in Gaza and the West Bank.

Reuters