Gaza rivals pull back, free some hostages

GAZA, Feb 4 (Reuters) Gunmen began withdrawing from Gaza's streets, some hostages were released and many shops reopened today as a shaky ceasefire appeared to be taking hold in factional fighting between Hamas and Fatah, residents said.

Local police took up positions at main intersections after a tense morning in which mortar bombs exploded near the offices of President Mahmoud Abbas of Fatah.

It was unclear how long this latest ceasefire, agreed late yesterday, would hold. Previous deals to stop the fighting collapsed within days or hours.

Gunmen from the governing Hamas movement released some of their Fatah hostages. But many more were still being held.

In Damascus, Hamas leader Khaled Meshaal called for both factions to cease fighting for the benefit of all Palestinians.

''I call on all our brothers in the Palestinian areas ... to shoulder their responsibilities. We want a lasting calm between us. We should preserve our blood. Dialogue is the only way to resolve our differences,'' Meshaal said.

Senior Fatah and Hamas officials met in Gaza to try to firm up the ceasefire efforts and said the signs were encouraging.

''The freeing of hostages will be completed tonight and a mechanism has been set up to remove checkpoints from the streets,'' said Ahmed Helles, a senior Fatah in the Gaza Strip.

Hamas is holding nine Fatah abductees and Fatah has 28 men.

Ayman Taha of Hamas said the parties had set midnight local time as the deadline for gunmen to be removed from rooftops in order to ''ease the plight of citizens and return things to normal''.

Residents of the narrow coastal strip, home to 1.5 million Palestinians, cautiously welcomed the relative calm after four days of fighting in which 27 Palestinians were killed.

''We hope that things will go back to normal,'' said Fadi Odwan as he reopened his perfume shop in Gaza City.

A hospital official said two members of Abbas's presidential guard, a force that receives US-funded training and non-lethal equipment, died early today from gunshot wounds suffered in fighting over the weekend.

More than 80 Palestinians have been killed in the fighting since December, when unity government talks between Islamist Hamas and the long-dominant Fatah group it defeated at the polls last year broke down and Abbas called for new elections.

Palestinians hoped a unity government would help ease a Western economic boycott of the Palestinian government.

SAUDI MEDIATION At the urging of Saudi Arabia, Abbas and Meshaal will hold meetings in the holy Muslim city of Mecca on Tuesday to try to resolve their differences. Previous talks ended without agreement.

Prime Minister Ismail Haniyeh of Hamas is also expected at the talks, his aide Mohammad al-Madhoun said.

Israeli officials said a summit meeting this month between US Secretary of State Condoleezza Rice, Israeli Prime Minister Ehud Olmert and Abbas hinged on the outcome of the Mecca talks.

Israel and the United States do not want Abbas to agree to a unity government that stops short of recognising Israel, renouncing violence and abiding by interim peace deals, as demanded by the ''Quartet'' of West Asia mediators.

Commenting on the violence between the rival factions, Olmert said, ''This is an internal matter which we are not pleased about.'' With Israel's approval, Egypt and Jordan have been supplying guns and ammunition to Abbas's forces, Israeli officials say.

REUTERS SRS BST0115