Fatah and Hamas, the two main rival Palestinian factions, have signed an accord to end seven years of violent division.
The signing of the accord also paves the way for elections later in the year and the formation of a unity government within weeks.
According to the Guardian, the move comes after a day of talks between Hamas and Fatah in Gaza that lasted until three hours.
The landmark pact also comes less than a week before the expiry of the deadline for US-sponsored peace talks between Israel and the Palestinian Authority on 29 April, the report said.
According to the report, Israel immediately responded by saying the Palestinian president, Mahmoud Abbas, was moving to peace with Hamas instead of peace with Israel.
After the agreement was announced, Israel cancelled a planned session of peace negotiations with the Palestinians.
The agreement was signed in Gaza City by Ismail Haniyeh, the prime minister of Hamas, and a senior Palestinian Liberation Organisation delegation dispatched by Abbas.(ANI)