CAIRO – Rival Palestinian factions Fatah and Hamas on Wednesday proclaimed a landmark reconciliation pact aimed at ending their bitter four-year rift that has left them divided between separate governments in the territories envisioned for a future Palestinian state.

The alliance set off ecstatic celebrations in the Palestinian territories. But Israel's leader called the presence of Hamas in the government a "big prize for terrorism," while Mideast envoy Tony Blair said the Palestinians would have to take a moderate stance toward Israel or risk international isolation.

Read the complete story(Some news sites require registration)