Palestinian faction leaders take part in a press conference in Gaza City June 27. -Xinhua/AFP

Palestinian factions, except the Islamic Jihad, have agreed on a statehood initiative that implicitly recognizes Israel's right to exist, official sources said yesterday.

The sources said President Mahmoud Abbas and Prime Minister Ismail Haniyeh have reached the agreement on a political document, penned by Palestinian prisoners in Israeli jails, implicitly recognizes Israel.

The agreement came after factions meeting in Gaza, a senior aide to Abbas said, adding "all the obstacles were removed and an agreement was reached on all the points of the prisoners' document."

A spokesman of the ruling Islamic Resistance Movement (Hamas) confirmed the agreement, saying the two sides would formally announce the deal later in the day.

Khader Habib, an Islamic Jihad leader in Gaza also told reporters that the national and Islamic factions, including the ruling Hamas, Fatah and other parties agreed on the document. However, Habib said that his movement still has its own reservation on certain clauses that came in the document that includes eighteen clauses that decides the future of the Palestinian cause.

Meanwhile, Salleh Zeidan, a senior Democratic Front for the Liberation of Palestine (DFLP) leader, expected that both Palestinian President Mahmoud Abbas and Prime Minister Haniyeh, also a senior Hamas leader, would convene later Tuesday. He told reporters that an agreement on the document would be signed by all the factions that participated in the national dialogue and would be sponsored by both President Abbas and Prime Minister Haneya.

The Palestinian National Dialogue Committee convened in Gaza on Tuesday to finalize the agreement, said Zeidan, adding that both Abbas and Haneya would be signing on it.

Signing the agreement on the prisoners' document would widely open the door for forming a national collation government instead of the Hamas-led one, said Zeidan.

The document of national accordance issued by the prisoners in Israeli jails called on establishing a Palestinian state on the Palestinian territories occupied by Israeli in 1967, side-by-side with the state of Israel.

It also called on keeping what they termed the armed struggle against Israel into the occupied Palestinian territories, but to enlarge this armed struggle into Israel if it is needed to. The prisoners' document had also called for resolving the Palestinian cause peacefully, according to the Arab peace initiative made in Beirut in 2002, and according to the international resolutions.

When the national dialogue started on May 25, President Abbas had warned that if the factions fail to agree on the document, he would call for a popular referendum.

Abbas had later issued a decree saying that a referendum would be decided on July 26, but also gave another chance to conferees to finalize the agreement.

Palestinian observers said that the timing of declaring an agreement on the document of the prisoners is an attempt to get the Palestinians out of the current political, security and economical crisis.

On Sunday, Hamas armed wing led an armed attack together with another two minor armed wings, into an Israeli military base near the crossing point of Kerem Shalom, southeast of the Gaza Strip. Two Israeli soldiers and two Palestinian gunmen were killed in the attack, but militants managed to abduct an Israeli soldier, and now they are calling for exchanging the soldier with Palestinian prisoners in Israeli jails.

Ahmed Kahloot, a Palestinian political analyst from Gaza, said he hope that reaching an agreement among all factions would help in convincing the militants who abducted the Israeli soldiers to set him free and end a crisis that threats the entire Palestinian cause.