Azzam al-Ahmad, a top Fatah official, says the sides agreed to form a caretaker government to prepare for the elections. He said Salam Fayyad, the prime minister, will probably not stay in office.
The Palestinians have been divided between two governments since Hamas overran the Gaza Strip in 2007. The Fatah-led Palestinian Authority has governed only the West Bank since then.
Israel at the time attacked the agreement as a "great victory for terrorism".
Fatah and Hamas, its Islamist rival, fought a brief civil war in 2007 that left deep scars on Palestinian politics.
Hamas and Fatah, the rival Palestinian factions, defied Israel on Wednesday by signing a power-sharing deal to seal a unity pact after a violent four-year feud.
When it was over, the two components of the Palestinian territories effectively became separate entities, divided ideologically as well as geographically, with Gaza under Hamas and control and the West Bank in the hands of the Fatah-dominated Palestinian Authority.
