Rival Palestinian factions Fatah and Hamas have set a three-month timetable to form a unity government and organise elections, officials from both sides said on Wednesday.

The agreement came during a meeting late Tuesday between Fatah’s official in charge of reconciliation affairs, Azzam al-Ahmed, and his Hamas counterpart Mussa Abu Marzuq, held at Egyptian security services headquarters in Cairo.

“We must take immediate steps to agree on the Palestinian National Council’s (PLO parliament) electoral law and set a date for elections,” Ahmed told the official Voice of Palestine radio.

“We have said that all these measures must be carried out within three months,” he added.

Hamas spokesman Sami Abu Zohri told AFP the two groups had decided to “finalise all reconciliation issues in three months, including that of the national unity government... and legislative and presidential elections.”

Palestinian president Mahmud Abbas of Fatah announced the start of talks on forming a unity government in April, after his prime minister Salam Fayyad, who is acting as cabinet caretaker, resigned.

Hamas, which governs the Gaza Strip, never recognised Fayyad’s authority as Palestinian premier, continuing instead to recognise its own prime minister Ismail Haniya.

The two movements signed a reconciliation deal in Cairo in 2011, pledging to set up an interim consensus government of independents that would pave the way for legislative and presidential elections within 12 months.

But implementation of the accord stalled over the make-up of the interim government, and a February 2012 deal signed by Abbas and Meshaal in Doha intended to overcome outstanding differences was opposed by Hamas members in Gaza.

Protesters clashed Wednesday with Israeli forces in the West Bank as thousands of Palestinians commemorated the Nakba - “catastrophe” - of the Jewish state’s creation in 1948, during which 760,000 Palestinians fled their homes.

Israeli soldiers fired rubber bullets at protesters gathered in front of Ofer military prison near Ramallah, wounding 15 of them, Palestinian medical officials said. Demonstrators pelted soldiers with stones, the army said.

In east Jerusalem, police clashed with demonstrators outside the Old City’s Damascus Gate, police spokeswoman Luba Samri told AFP, saying three policemen were injured and eight Palestinians arrested.

Thousands of Palestinians took to the streets in the West Bank and the Gaza Strip to demonstrate on Nakba Day and assert their “right to return” to where their ancestors fled after the Israeli victory over Arab armies.

Protesters held aloft Palestinian flags and replicas of the keys to the houses their families abandoned in 1948. Some 1,000 people turned out in the northern West Bank town of Nablus, and another 300 in southern Hebron.

In Hamas-ruled Gaza, thousands of people gathered in the centre of Gaza City, holding placards that read “We will get back to Palestinian villages and towns, no matter how long it takes” and “The right of return is sacred and inalienable”.

In Ramallah, where the Palestinian Authority is based, sirens sounded for 65 seconds, representing the 65 years of the existence of the modern state of Israel.

Palestinian president Mahmud Abbas in a televised speech on Tuesday evening said “there is no country in the world, including the United States of America, that denies our right to establish our independent state based on the 1967 borders” - a reference to land occupied by Israel since the Six Day War.

“We are today a number (of people) and a truth that cannot be overlooked,” he said.

In 1948, more than 760,000 Palestinians - estimated today to number more than five million with their descendants - fled or were driven out of their homes.

Around 160,000 Palestinians stayed behind and are now known as Arab Israelis. They now number about 1.3 million people, or some 20 percent of the population.