The emir of Qatar, Sheik Hamad bin Khalifa Al-Thani, left, congratulates Lebanese Prime Minister Fouad Siniora after a political deal is reached among rival Lebanese political factions in the Qatari capital Doha Wednesday. (Hasan Jamali/Associated Press)

Rival Lebanese parties reached a deal Wednesday to elect a new president by the end of the week, ending an 18-month political crisis and a month of violence that left 67 people dead.

Delegates from the ruling U.S.-backed coalition party and the Hezbollah-led opposition struck their agreement after five days of intense talks mediated by the Arab League.

Part of the agreement was a key demand by the militant Hezbollah group, that the opposition be given veto power in the new national unity government, causing some concerns over the growing power of the group, considered a terrorist organization by the U.S. and Israel.

But U.S. Secretary of State Condoleezza Rice callled the agreement a "positive step" toward resolving the crisis. "We call upon all Lebanese leaders to implement this agreement in its entirety."

At a ceremony celebrating the deal in Doha, the capital city of Qatar, mediator Sheik Hamad bin Khalifa Al-Thani, the Qatari emir, said the deal would be "carried out immediately," according to Reuters.

Politicians in Doha could be seen hugging and congratulating each other while in Beirut, celebratory gunfire erupted in the streets as soon as news of the deal was broadcast on television.

Al-Thani suggested the new president would be elected by Lebanon's parliament within 24 hours, although Lebanese parliamentary speaker Nabih Berri suggested it could take place by the end of the week, and Lebanese TV said it would take place Sunday.

The agreed-upon candidate is army commander Gen. Michel Suleiman, who is considered a neutral figure.

Hezbollah will now have 11 seats in government, as opposed to the six it had before. The ruling coalition will have 16, and three seats will be distributed by the new president, said AP, which obtained a copy of the agreement.

Hezbollah's also getting its demand for an electoral law that divides Lebanon into smaller districts, allowing better representation of the country's various sects.

Hezbollah plays down victory

While Hezbollah appeared to be the victor in the deal, members of the ruling coalition said the concessions were necessary.

"I know that the wounds are deep and my injury is deep, but we only have each other to build Lebanon," said Saad Hariri, son of Rafik Hariri, the assassinated former prime minister of Lebanon.

Hezbollah's chief negotiator, Mohammed Raad, downplayed the group's win.

"Neither side got all it demanded, but [the agreement] is a good balance between all parties' demands," he said.

Opposition-allied Lebanese parliament Speaker Nabih Berri also announced at the Doha ceremony that the opposition tent encampment, which has paralyzed Beirut's commercial centre for more than a year, would be dismantled.

Berri called the move a "gift" from the opposition. Shortly after the announcement, trucks began hauling away mattresses and supplies from the encampment, while opposition supporters dismantled tents.

Leaders in Iran and Syria were quick to praise the deal while in France, Foreign Minister Bernard Kouchner also spoke out in favour of the agreement.

Lebanese Prime Minister Fuad Saniora said Lebanon should draw lessons from the political crisis that gripped the country.

"We must … pledge never to resort to arms to resolve our political differences," he said. "We should accept each other and hold dialogue to solve the problems. We want to live together, and we will continue that. We have no other choice."

The agreement calls for rival factions to refrain from using violence to solve political disputes.

No president since November

The country has been without a president since November 2007, when pro-Syrian Emile Lahoud's term ended and parliamentarians could not agree on a candidate to replace him.

Scheduled parliamentary elections were repeatedly cancelled as party officials argued over who was best fit for the job and what shape the government should take once the new president was in place.

The ruling coalition, which opposes Syrian influence in Lebanon and is supported by Western countries, only has a slim majority in the parliament and needs support of the pro-Syrian opposition to elect a president. A vote for president must pass by a two-thirds majority.

Political discord in Lebanon erupted in November 2006, when opposition lawmakers resigned from government because they weren't given enough seats to ensure veto power over policy decisions.

Violence peaked on May 7 of this year, as pro-government groups and the Hezbollah-led opposition clashed for a week in west Beirut, the central mountains and the north. At least 67 people died in the worst eruption of internal fighting since the 1975-1990 civil war.