Palestinian President Mahmoud Abbas called for renewed dialogue with Hamas, in what appeared to be an about-face after insisting for a year he would talk to the Islamic militants only if they give up control of Gaza.
Hamas, which seized Gaza by force last year, immediately welcomed Abbas' offer, made in a televised speech.
However, Abbas gave no details about a future dialogue, including whether he himself would participate or seek mediation from Arab states. It was also not clear from his wording whether he had dropped all preconditions.
If Abbas were to start talking to Hamas, he could jeopardise the broad international support he gained after Hamas' Gaza takeover.
Abbas spoke after months of peace talks with Israel have yielded no tangible results. Earlier today, his chief negotiator, Ahmed Qureia, said it would take a miracle to meet the year-end target for a deal set by President Bush.
At the same time, Hamas appears increasingly entrenched in Gaza, despite a blockade by Israel and Egypt that has virtually cut off the territory from the world and driven its 1.4 million residents deeper into poverty.
A close Abbas aide, Nimer Hamad, said circumstances dictate a dialogue now.
"The failure of the peace process, the tragic situation in Gaza, the entire Palestinian situation required thinking courageously of an exit," Hamad said.