Gunmen began withdrawing from Gaza's streets, some hostages were released and many shops reopened yesterday as a shaky ceasefire appeared to be taking hold in factional fighting between Hamas and Fatah, residents said.

Local police took up positions at main intersections after a tense morning in which mortar bombs exploded near the offices of President Mahmoud Abbas of Fatah.

It was unclear how long this latest ceasefire, agreed late on Saturday, would hold. Previous deals to stop the fighting collapsed within days or hours.

Gunmen from the governing Hamas movement released some of their Fatah hostages. But many more were still being held.

Residents of the narrow coastal strip, home to 1.5 million Palestinians, cautiously welcomed the relative calm after four days of fierce fighting in which 27 Palestinians were killed.

More than 80 Palestinians have been killed in the fighting since December, when unity government talks between Islamist Hamas and the long-dominant Fatah group it defeated at the polls last year broke down and Abbas called for new elections.

Palestinians hoped a unity government would help ease a Western economic boycott of the Palestinian government.

At the urging of Saudi Arabia, Abbas and Hamas' political leader Khaled Meshaal will hold meetings in the holy Muslim city of Mecca tomorrow to try to resolve their differences.

Prime Minister Ismail Haniyeh of Hamas will leave Gaza shortly to take part in the talks, according to Mohammad al-Madhoun, director of Haniyeh's office. Previous talks ended without agreement.

Israel and the United States do not want Abbas to agree to a unity government that stops short of recognizing Israel, renouncing violence and abiding by interim peace deals.

Source: China Daily/Agencies