Middle East:Having secured a Palestinian deal, Saudi Arabia may now turn to Lebanon, writes Michael Jansen.
The Saudi-brokered power- sharing agreement reached by Fatah and Hamas late on Thursday not only amounts to a historic compromise by bitter rivals but also strengthens Palestinian democracy.
A year after Hamas won a majority of seats in parliament, Fatah, which had been the dominant faction since 1968, has admitted it cannot rule on its own. Fatah agreed to the deal because 10 months of international sanctions and attacks on Hamas paramilitaries did not bring down the Hamas government.
Although President Mahmoud Abbas threatened to call fresh elections, he could not afford to do so because he had no guarantee that Fatah would win a majority of seats in the legislature and form a new government.
Before risking fresh elections, Fatah must end corruption, reform and replace its ageing leadership with younger men. So far, the old guard has refused to follow this prescription.
By agreeing to serve under Hamas's prime minister Ismail Haniyeh and accept six ministries in comparison with Hamas's nine, Fatah has acknowledged that it is to be the second-ranking faction in the coalition. When it admitted it can no longer monopolise power, Fatah learned the fundamental lesson of operating in a democratic system.
After six months of haggling, Hamas accepted that it must make the transition from national liberation movement to government. It has had to recognise that the Palestinians depend on international recognition and financial assistance. This has forced it to adopt a pragmatic approach to policy-making instead of refusing to compromise over an ideology which rejects Israel's existence.
By stating that it will respect past agreements made by the Fatah-led Palestinian Liberation Organisation (PLO), Hamas has extended implicit recognition to Israel.
The PLO granted explicit recognition in an exchange of letters with Israel ahead of the signing of the Oslo Accord in September 1993.
The pledge in the Mecca accord to reinvigorate the PLO, which has been dormant since Oslo, and bring Hamas into the organisation will formalise Hamas's acceptance of past commitments.
If and when negotiations with Israel are resumed, the PLO is to be the Palestinian interlocutor, while the coalition will govern Palestinian territories on a day-to-day basis.
Both Fatah and Hamas were under strong domestic pressure to reach a deal because 70 per cent of Palestinians live below the poverty line and factional fighting, particularly in Gaza, was threatening to escalate into all-out civil war.
Mr Haniyeh's retention of the top job and Hamas's of the largest number of ministries reflects its election victory in last year's poll and gives Hamas a key role in decision-making. But the national unity coalition will not be a "Hamas government" or an "Islamist government".
Hamas will not hold an outright majority of cabinet posts and will have to share power with Fatah, independents who will hold finance, foreign affairs and interior, as well as four ministers from small secular parties. The advantage remains with secularists.
The inclusion in the new government of internationally respected independents, such as prospective finance minister Salam Fayad, could promote an end to international ostracism of the Palestinian Authority.
During his previous term in office, Mr Fayad, a former World Bank official, cleaned up the authority's murky finances.
Saudi Arabia, which has pledged $1 billion in aid, is expected to press other wealthy Arabs to contribute to the Palestinian Authority.
Riyadh is also likely to exert pressure on Washington to reconsider its boycott of the Palestinian government and encourage Israel to hand over the $500 million owing in taxes and tariffs collected by Israel on behalf of the Palestinians.
Europe, which has expressed misgivings over continuing of financial sanctions, may consider unfreezing $1 billion in aid.
Following Saudi Arabia's determining role in achieving the Mecca accord, Washington wants Riyadh to become a major player on the regional scene and a counterweight to Iran, the Bush administration's main local antagonist.
With the Mecca accord under their belt,Arab analysts predict that the Saudis will now renew efforts to mediate a power-sharing agreement between the Lebanese government and opposition with the aim of averting civil strife there.
Success in Lebanon could encourage Saudi Arabia into filling the Arab leadership vacuum.