Fatah and Hamas have reportedly agreed to a new truce to quell violence between the two rival factions, according to a Palestinian official.

Palestinian cabinet spokesman Ghazi Hamad says the groups have agreed to remove armed men, take down street checkpoints, and exchange hostages.

There were fears the Palestinian unity government, which was formed earlier this year, was in danger of collapsing Monday as members of the two political factions clashed in the streets.

Nine people have died and 70 people have been injured in the Gaza Strip since Friday, when sympathizers of the secular Fatah party of President Mahmoud Abbas and the Islamist Hamas movement of Prime Minister Ismail Haniyeh clashed in street battles.

The latest round of fighting began last week after Abbas ordered the deployment of 3,000 troops in Gaza over the objections of Hamas.

The spike in violence prompted the sudden resignation Monday of the Palestinian Interior Minister Hani Kawasmeh, a former judge and an independent member of the unity government, who said he had been denied the authority to crack down on the warring parties.

At a news conference, Kawasmeh accused both Hamas and Fatah leaders of failing to support him or his plan for restoring law-and-order in an increasingly anarchic society.

Haniyeh is taking over the interior ministry until the two factions have agreed on a replacement, said Mustafa Barghouti, the Palestinian Authority's information minister.

Peace process hurt

The Palestinian infighting, combined with a government crisis in Israel that is threatening to bring down Israeli Prime Minister Ehud Olmert, is hurting new attempts to bring Israelis and Palestinians back to the peace table after seven years of conflict.

Despite the setbacks, Olmert planned to meet with King Abdullah in Jordan on Tuesday to explore ways of advancing an Arab League peace initiative offering Israel normalized relations in exchange for land withdrawals.

At the centre of the new Palestinian fighting is a dispute over who controls the security forces. A majority of the 80,000 security officers in the West Bank and Gaza are loyal to Abbas while Hamas set up its own 6,000-strong militia last year.

At a Monday news conference, Kawasmeh accused both Abbas and Haniyeh of failing to support him.

"From the beginning, I faced obstacles that robbed the ministry of its powers and made my position empty, without authority," he said. "I told all the concerned parties, including the president and the prime minister, that I must have full authority to be able to carry out my full duties."

The unity government has also failed at its second task — trying to lift an international boycott of financial help for the Palestinian Authority that was imposed when Hamas first took power after winning parliamentary elections last year.

Despite the renewed strains, Abbas was unlikely to dissolve the coalition soon because it would be difficult to hold new elections in the violent climate in the Palestinian territories. Hamas would certainly object to a new ballot after winning a four-year term in last year's vote.

On Monday, the dead included a truck driver hit by a stray bullet while delivering bread and three Fatah supporters shot in clashes in Gaza City and the southern town of Khan Younis.

With files from the Associated Press