Mahmoud Abbas, the Palestinian president and head of Fatah, and Khaled Meshaal, the leader of Hamas, have agreed to make ending violence between Palestinian factions their priority and to continue talks on the formation of a unity government.
Speaking after three hours of talks in Damascus, Abbas told reporters their meeting had been "fruitful".
He said: "We agreed that the utmost priority is that there should be no spilling of Palestinian blood.
"We will continue our meetings and dialogue in the near future to reach an agreement that ends the siege on the Palestinian people."
A statement read to reporters said talks on a unity government will continue in two weeks.
Dialogue
Tensions between the two factions, which had already claimed a number of lives, boiled over in the Gaza Strip last month, killing more than 30 people.
Meshaal, who moved to Syria from Jordan after an Israeli assassination attempt in 1997, expressed "pleasure" at the meeting, which he described as being of "great significance" during the joint press conference with Abbas.
He said there were "points of disagreement between us but we will sort it through dialogue".
Zeina Khodr, Al Jazeera's correspondent in Damascus, said: "There was a lot of diplomatic language but, as expected, there was no breakthrough on the points of contention.
"[During the press conference] they didn't even go into specifics concerning the national unity government. So there was not much achieved."
Delays
The meeting, which was originally scheduled for Saturday, had been postponed after officials failed to reconcile differences over a new government and how it would deal with Western demands.
On Sunday, Farouq al-Shara, Syria's vice-president, held separate talks with Abbas and Meshaal in a last-ditch effort to get the two men to meet.
Hamas officials had said Abbas and Meshaal would discuss whom to appoint to the ministries of the interior, finance and foreign affairs in a unity government.
Ismail Haniya, the Palestinian prime minister, told reporters in Gaza on Sunday: "Ninety per cent of the issues have been agreed upon. The remaining issues include those relating to the political agenda and key ministries.
"With a more focused and comprehensive dialogue, we will be able to reach final understandings that will prepare the ground for the formation of a national unity government."
Fatah and Hamas have tried for months to agree on a national unity government, in the hope of ending a boycott by the US and EU and in order to present a united front towards Israel.
Washington and Brussels consider Hamas to be a terrorist group and suspended direct financial aid to the Palestinians because the movement refuses to renounce violence or recognise Israel.