Hamas leaders declared an end to the “era of division” after reconciliation talks between rival Palestinian factions produced surprise results on Wednesday afternoon.

The would-be breakthrough saw Hamas and Fatah agree to unite under the leadership of Mahmoud Abbas and concludes a seven-year division brought about by a violent split in 2007.

News of the reunification comes after Abbas sent a delegation from his Fatah party to the Gaza Strip, in a move that finally appeared to herald the end of any meaningful peace talks between Palestinian and Israeli negotiators.

The two parties were pulled together last summer at the instigation of US Secretary of State John Kerry, but a series of spats and a lack of meaningful progress saw the talks shudder to a halt.

That led Abbas to seek out his long-time Islamist rivals, who declared the day to be one of victory.

“This is the good news for our people,” said Ismail Haniyeh, prime minister of the Hamas-led government in Gaza, as thousands of Palestinians took to the streets to celebrate. “The era of division is over.”

Although agreed, previous reconciliation agreements have never been implemented, partly because Israeli Prime Minister Benjamin Netanyahu has said that Abbas could choose “peace with Israel or peace with Hamas”.

Netanyahu’s position has not changed since telling Abbas “you can have one but not the other” but Palestinian officials have always insisted that reconciliation was an internal matter that would only reinforce peace.