GAZA CITY, 28 June 2006 — After weeks of acrimonious negotiations aiming to lift crippling international aid sanctions, the rival Hamas and Fatah movements struck a deal yesterday on a plan implicitly recognizing Israel, officials said.

Also, the first information was given yesterday about an abducted Israeli soldier when a Palestinian leader said the soldier was being held in a “secure place.” He claimed that his group also seized a Jewish settler in the West Bank.

Amid fears of a serious escalation of violence in the Gaza Strip and three months after taking office, the rival Palestinian factions endorsed a document calling in principle for a two-state solution to the conflict with Israel.

Hamas and the Fatah party of President Mahmoud Abbas had reached agreement on a document authored by Fatah and other leaders jailed in Israel, officials who attended the latest round of talks in Gaza, announced.

They said that although some changes were made to the “Prisoners Document” in the compromise talks, a clause calling for an “independent state with Jerusalem as its capital on all territories occupied in 1967” had remained unchanged.

Hamas has to date rejected any accommodation with Israel, claiming all of historic Palestine as the basis for an Islamic state. Since taking office in March, the movement also defied international pleas to change its charter to accept the Jewish state’s right to exist.

Abbas has pressed Hamas to accept a two-state solution in a bid to free the Palestinian Authority from the international isolation and consequent financial crisis it has sunk into.

The agreement announced yesterday would render a national referendum announced by Abbas and scheduled for July 26, which Hamas had vehemently opposed, unnecessary.

Another prominent organization, the Islamic Jihad, announced for its part that it was rejecting the document as it implicitly recognized Israel and called for limiting attacks on Israelis to the areas occupied since 1967.

The talks in Gaza came as more Israeli troops took up positions near the border with the strip, a day after Prime Minister Ehud Olmert threatened a major military offensive to rescue the soldier held captive there. Israel has upped the pressure by tightening a blockade on Gaza, imposed after Palestinians raided a military outpost bordering the strip early Sunday, killing two soldiers and abducting 19-year-old Cpl. Gilad Shalit.

All crossings into the strip had been closed and no goods, including food and medicine, would be allowed in until further notice, the army said. The siege was also enforced via the sea, with no fishing boats allowed out.

Palestinians in Gaza were also making preparations to resist the Israelis, piling up sand heaps at the entrances to the northern Gaza towns of Beit Lahiya, Beit Hanoun and Jabaliya.

Frantic international mediation efforts to avoid the feared escalation meanwhile continued. Abbas telephoned Arab leaders, urging them to exert their influence over Syria and press Damascus-based Hamas leader Khaled Mashaal to order Hamas’ armed wing to free the soldier.

A spokesman for the Fatah party also repeated calls issued earlier by senior leaders of the movement for the soldier to be freed.

Hamas’ armed wing had claimed responsibility for Sunday’s raid, along with the Popular Resistance Committees (PRC) and a third group calling itself the Islamic Army.

United Nations Secretary-General Kofi Annan urged “all parties to exercise restraint at this grave moment and to take all possible steps to avoid further escalation and bloodshed.” United States State Department spokesman Sean McCormack issued a similar call, with both men also demanding the soldier’s “immediate release.”

An Israeli government official, meanwhile, denied the existence of a 48-hour deadline after which Israeli forces would enter the strip. Israel Army Radio reported that Egyptian mediators had informed the soldier’s family that he was wounded in the stomach and had a broken arm, but that his condition was not serious.

A senior Israeli officer told a parliamentary committee dealing with security that the army knew that the soldier was being held in a refugee camp in the area of Rafah in the south of Gaza, Israel Radio reported. The information about captive Israelis came from PRC, a group with close ties to the Hamas-led Palestinian government. “The soldier is in a secure place that the Zionists cannot reach,” PRC spokesman Mohammed Abdel Ali said.

Fears, meanwhile, were growing in Israel over the fate of an 18-year-old West Bank settler missing since he was last seen hitchhiking on Sunday.

Israeli officials at first discounted statements by the PRC that it had kidnapped the youth, but late yesterday afternoon admitted the abduction claims could be true after all.

And in the Gaza Strip, a fighter loyal to Hamas was killed yesterday and five civilians wounded when a vehicle exploded, local security and medical sources said.

In a telephone call to AFP in Gaza City, the armed wing of Hamas, said one of its members, Hamza Marhb, was killed in the blast. Israel’s military has flatly denied any involvement in the incident.

Marhb, a local leader in the Ezzedine Al-Qassam Brigades, was alone in the vehicle, the faction said.

— With input from agencies