Occupied Jerusalem: The Palestinian prime minister crossed into the Gaza Strip on Monday in a major move towards reconciliation between Hamas and the mainstream Fatah party, a decade after the group seized the territory in a civil war.

Hamas announced last week that it was handing over administrative control of the Gaza Strip to a unity government headed by Rami Al Hamdallah, but the movement's armed wing remains the dominant power in the enclave of two million people.

Hamas's reversal was the most significant step towards elusive Palestinian unity since the government was formed in 2014. It failed to function in Gaza because of disputes between Hamas and Fatah over its responsibilities.

Analysts said narrowing internal divisions could help President Mahmoud Abbas counter Israel's argument that it has no negotiating partner for peace.

A Hamas police honour guard and hundreds of Palestinians, many of them waving Palestinian flags, welcomed Hamdallah outside the Hamas-controlled checkpoint, down the road from Israel's Erez border crossing through which the prime minister and his delegation passed.

"It is a day of Eid, a national holiday," said Abdul Majid Ali, 46. "We hope this time reconciliation is for real." Hamas, considered a terrorist group by Israel and the West, made its dramatic reversal towards unity last month, disbanding its Gaza shadow government, after Egypt, Saudi Arabia and the United Arab Emirates imposed an economic boycott on its main donor, Qatar, over alleged support of terrorism.