|Hamas and Fatah signed the agreement in Yemen|
Fatah and Hamas, in an initiative sponsored by Yemen, have agreed to hold talks on reconciliation and forming a national unity government.
But there are many obstacles facing them, most notably Israel's refusal to speak to Hamas.
The agreement comes on the heels of a report by the International Crisis Group which concludes that all attempts to isolate Hamas had backfired.
The report recommends engaging the group. The move, the report argues, would shift Hamas towards moderation.
This episode of Inside Story aired on Sunday, March 23, 2008 at 17:30 GMT
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