Palestinian factions gathered in Cairo on Tuesday signed a reconciliation deal that will pave the way for elections within a year and seeks to end the divide between Gaza and the West Bank.

Representatives of 13 factions, including Palestinian President Mahmoud Abbas's Fatah party and its rival Hamas, as well as independent political figures, inked the deal following talks with Egyptian officials.

Hamas chief Khaled Meshaal will meet next week in Cairo with Palestinian president and Fatah leader Mahmud Abbas to sign a unity deal, a senior Fatah official said on Friday, Agence France Presse reported.

It will be the first time the two men have met since Hamas took over the Gaza Strip in June 2007, forcibly ousting Fatah from the coastal territory after days of bloody street battles.

Palestinian President Mahmoud Abbas on Monday reappointed Salam Fayyad as premier and tasked him with forming a new government after his cabinet resigned, an official said.

"Abbas reappointed Fayyad and asked him to form a new government," a senior official in the president's office told Agence France Presse shortly after Fayyad's cabinet resigned en masse.

Former Israeli Prime Minister Ehud Olmert says Palestinian President Mahmoud Abbas made a "historic mistake" by rebuffing a peace offer made during negotiations in 2008.

Excerpts from an upcoming memoir by Olmert were published Friday in the Israeli daily Yediot Ahronot.

The Middle East peace process lay in tatters Wednesday after Washington admitted defeat in its efforts to secure an Israeli freeze on settlement building, the Palestinians' condition for resuming talks.

Speaking late on Tuesday, U.S. officials admitted top-level efforts to coax Israel into imposing new curbs on West Bank settlement construction had gone nowhere, prompting Palestinian president Mahmoud Abbas to declare a crisis in peace efforts but backslapping among Israeli hardliners.

Israel on Wednesday was discussing the format of an investigation into its deadly raid on a Gaza-bound flotilla, but Prime Minister Benjamin Netanyahu insisted soldiers would be off-limits.

Israel was in talks with "several members of the international community" about the investigation, Netanyahu said, stressing that it should focus on "the pro-Palestinian activists who fought the naval commandos with knives and clubs."

President Barack Obama Wednesday pledged unwavering commitment to forge significant progress in the Middle East this year, despite the furor whipped up by Israel's raid on a Gaza aid flotilla.

Welcoming Palestinian President Mahmoud Abbas to the White House, Obama promised the "full weight" of U.S. diplomacy on the latest crisis and to push Israelis and Palestinians out of a "dead end" and into direct peace talks.