The accord, to be inked in Cairo, would end a four-year rift between the bitter rivals and pave the way for a joint caretaker government ahead of national elections next year.
Israel has denounced the plan for Abbas' Fatah movement to join forces with Hamas because of the militant group's long history of deadly attacks against Israeli targets, and has equated the deal with a renunciation of peacemaking.
Like the United States and the European Union, Israel considers Hamas a terrorist organization and says it will not negotiate with a future Palestinian government that includes the Iranian- and Syrian-backed group.
It's not clear whether Western powers would deal with the new government that is to emerge from the unity deal.
They've said they are waiting to see its composition.
The Quartet of Mideast mediators - the US, the EU, the United Nations and Russia - has long demanded that Hamas renounce violence and recognise the principle of Israel's right to exist.
But Abbas aide Nabil Shaath told Israel Radio ahead of Wednesday's signing that these demands "are unfair, unworkable and do not make sense." The only thing the Quartet needs to know, he said, is that Hamas "would refrain from any violence ... and be interested in the peace process." Hamas and other Palestinian militant factions in Gaza have agreed to abide by an unofficial truce with Israel, largely in place since Israel's January 2009 war in the territory.
But it is unclear how long that truce will last, and Hamas has consistently rejected negotiations with Israel.
The reconciliation deal is designed to unify the dueling Palestinian governments that emerged after Hamas violently wrested control of Gaza from security forces loyal to Abbas in June 2007, leaving his Fatah controlling only the West Bank.
In a symbolic step, Hamas allowed Fatah-controlled Palestine TV to broadcast from Gaza for the first time since the 2007 takeover. The station's Gaza correspondent, Adel Zaanoun, discussed the excitement that Gazans felt about unity and invited Ismail Radwan, a Hamas leader, onto the program.
"Today we end a dark chapter in our recent history," Radwan said. "It's time now to work together ... With the support of our people and the Arab brothers, we will make this agreement work." Also for the first time, Hamas permitted residents to wave yellow Fatah banners along with the green Hamas flags.
Fatah displays had been banned by Hamas police in the past.
Some Gaza residents greeted the impending deal with a mixture of hope and caution, the last failed attempt at unity fresh in their minds. Their concerns were underscored by reports Wednesday's signing ceremony was slightly being delayed by last-minute arguments.
"Hope is all we have. We have suffered a lot from the political split," said Yousef Ali, a 22-year-old law student in Gaza. "But fear is there. Failure is possible and this is something we need to keep in mind ... I think the people will not show mercy this time for anyone who will try to sabotage this unity." Ibrahim Qassem, a 45-year-old driver, said he did not trust the Palestinian leaders. "I saw the same atmosphere in 2007. What's the difference now?" The deal doesn't resolve many key issues, such as control of security forces, and many expect it to quickly crumble.
Gaza's deputy foreign minister, Ghazi Hamad of Hamas, told Israel Radio that the accord is meant "to put our internal Palestinian house in order." "We want to do something new, we don't want to waste our time with negotiations all the time," Hamad said.