Thousands of Palestinians took to the streets of Gaza on Thursday to celebrate as the leaders of rival political factions signed a deal to end a decade-long split.

Leaders of the secular Fatah and Islamist movement Hamas signed the deal more than 200 miles away in the Egyptian capital Cairo, but thousands of Palestinians poured out onto the streets of the impoverished enclave.

In a square in Gaza City, they chanted songs about national unity, while people distributed celebratory sweets.

Large signs bearing the faces of Palestinian president Mahmud Abbas, Egyptian leader Abdel Fattah al-Sisi and Hamas leader Ismail Haniya were held aloft by the crowd.

Jihad Seaam, 23, said the announcement had brought new hope.

"Young people today are filled with unemployment, poverty and frustration," he told AFP in Gaza.

"Their hope was renewed today with the reconciliation agreement," he said. "The most important thing now is the implementation of the agreement and not to let us down."

Hamas has ruled Gaza since seizing it in a near civil war in 2007 and have been at loggerheads with Fatah, based in the occupied West Bank, ever since.

Living conditions for the two million Gazans have worsened in the past decade, and the UN says the territory is rapidly becoming "unlivable".

Hamas has fought three wars with Israel since 2008, and the Gaza Strip has faced an Israeli blockade and a border with Egypt that has also remained largely closed in recent years.

In the West Bank, too, people welcomed the agreement, though there were no major celebrations in Ramallah, the base of the Fatah-dominated Palestinian Authority.

"We hope that it will be a real agreement and that (officials from the two movements) will eliminate the obstacles that are hindering it," said Siam Nouwwara, a social worker.

"Gaza residents are tired, like the residents of the West Bank. There was a feeling of two separate peoples. People weren't saying 'Palestine' any more, but rather 'Gaza and the West Bank.'"

Gaza suffers from high levels of unemployment and poverty.

In recent months, residents have received only a few hours of electricity per day.

Under the terms of Thursday's agreement, the internationally recognised Palestinian Authority will resume control of the strip by December 1.

- Lingering doubts -

Previous reconciliation agreements between Hamas and Fatah have failed, and many Gazans remain sceptical that this time will be different.

Rehaab Kanaan, 55, said she was hoping the politicians would not "disappoint our people who are showing their joy at this Palestinian marriage. That was what happened in the past."

If the agreement is successfully implemented, Egypt is expected to open its border with Gaza to allow people to travel, while the slashing of some government employees' salaries could be reversed.

Ahmad Atta, a 35-year-old government employee in Gaza, also had nagging doubts.

"I am happy but still worried. I won't be completely happy until our salaries are returned, the electricity crisis is solved and the borders are opened.

"Then it will be a real reconciliation."