Rival parties Hamas and Fatah, as well as other political factions, have agreed to set up a national council, and hold elections.
Palestinian political parties on Tuesday announced that they have reached a deal to form a national unity government prior to the holding of elections, after three days of reconciliation talks in Russia's capital Moscow.
The non-official talks began on Sunday under Russian auspices with the goal of restoring "the unity of the Palestinian people."
Representatives came from President Mahmoud Abbas' party Fatah, Hamas, Islamic Jihad and other factions.
Relations between rival parties Hamas and Fatah, have been at a standstill since Hamas seized control of Gaza in 2007.
After the government is formed, they will set up a national council that would include Palestinians in exile and hold elections.
Last year, the Palestinian government postponed the first municipal polls, in the occupied West Bank and Gaza Strip, in 10 years after the high court ruled they should be held only in the Fatah-run West Bank.
The last time the Palestinians staged elections in which both Hamas and Fatah took part was in 2006.