The agreement between Fatah and Hamas for a Palestinian unity government, to be headed by Palestinian President Mahmoud Abbas, almost certainly signals the end of the short-lived attempt to re-launch Israeli-Palestinian peace talks.

On Monday Mr Abbas and the head of Hamas' political bureau, Khaled Mashal, signed an agreement for Mr Abbas to head a new unity government to be formed before the as-yet unscheduled Palestinian elections.

The government, to be comprised mainly of "technocrats", is tasked with preparing the elections for a new Palestinian parliament and president.

One of the main sticking points had been the identity of the Palestinian prime minister, with Hamas vetoing Mr Abbas' insistence that the current PM, Salam Fayyad, retain his post. It is unclear if Mr Fayyad will play any role in the new administration, but Mr Abbas is thought to want him to be a deputy prime minister, with responsibility for running the Palestinian Authority in the West Bank.

Current Hamas prime minister in Gaza, Ismail Haniyeh, may also be appointed as a deputy PM with similar responsibilities in the Gaza Strip.

Mr Abbas announced after the signing that the PA would release Hamas prisoners.

The two men will meet again later this month in Cairo to discuss further integration in the Palestinian national movement.

Israeli Prime Minister Benjamin Netanyahu responded angrily, saying that "Hamas is a terror organisation that aspires to destroy Israel and is supported by Iran. The Palestinian Authority has to choose between a treaty with Hamas and peace with Israel. Hamas and peace don't go together."

Despite this, neither Mr Netanyahu nor any other Israeli official is currently prepared to announce the end of the peace process so as not to take the international blame.

Most of the attention of the Israeli leadership is focused on developments in Syria and the possibility of an attack on Iran in the next few months, so it seems as if the Palestinian issue will be consigned for the near future to the back-burner. Israeli diplomats do not expect any major international pressure to deliver new concessions while the situation in the region is so volatile and the US is an election year.

A new date has yet to be set for the continuation of the recent meetings under Jordanian auspices.

The US State Department said that the Fatah-Hamas agreement was an "internal Palestinian affair". The agreement is not yet a done deal, as Hamas leaders in Gaza view it as capitulation to Fatah and are opposed to the attempts by Mr Mashal to pursue a more diplomatic course for the organization, at the expense of "the armed struggle".