The West Bank-based Palestinian prime minister crossed into the Gaza Strip on Monday in a move towards reconciliation between Hamas and the mainstream Fatah party, a decade after the Islamist 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 Palestinian enclave of two million people.
"We return to Gaza in order to conclude reconciliation and national unity and end the painful impacts of divisions and to rebuild Gaza brick by brick," Hamdallah said at a welcoming ceremony.
Forces loyal to Palestinian President Mahmoud Abbas lost control of Gaza in fighting with Hamas in 2007.
Hamas's reversal was the most significant step towards Palestinian unity since the government was formed in 2014. It failed to function in Gaza - where Israel and Hamas have fought three wars since 2008 - because of disputes between Hamas and Fatah over its responsibilities.
Analysts said narrowing internal divisions could help western-backed Abbas counter Israel's argument that it has no negotiating partner for peace with the Palestinians.
"We came with instructions from Abbas to tell the world from the heart of Gaza that the Palestinian state cannot and will not be established without geographical and political unity between Gaza and the West Bank," Hamdallah said.
A Hamas police honour guard and hundreds of Palestinians, many of them waving Palestinian flags, awaited Hamdallah outside the Hamas-controlled checkpoint, down the road from Israel's Erez border crossing through which the prime minister and his motorcade passed.
"It is a day of Eid, a national holiday," said Abdel-Majid Ali, 46. "We hope this time reconciliation is for real."
Hamas, considered a terrorist group by Israel and the West, made its dramatic step towards unity last month, disbanding its Gaza shadow government, after Egypt.
"The road ahead will be long and hard, but momentum of reconciliation and peace should not be missed," Nickolay Mladenov, the U.N. special coordinator for the Middle East peace process wrote on Twitter.
The unity drive also marked a return to prominence of exiled former Gaza security chief Mohammed Dahlan, once one of Hamas's fiercest enemies and now a leading figure in regional efforts to pull the territory back into the Palestinian mainstream.
Dahlan, based since 2011 in the United Arab Emirates, is behind an influx of cash to prop up Gaza and detente between Hamas and Arab states including Egypt, which hosted reconciliation talks.
Michael Oren, deputy minister for diplomacy in Israeli Prime Minister Benjamin Netanyahu's cabinet, played down the unity drive, saying "it happens every two or three years" and that Hamas remains dedicated to Israel's destruction.
"One of the issues is whether Hamas will be able to retain its arms. If it does then it's a non-starter for Israel," he said.
Abbas' pressure over the past several months on Hamas to loosen its grip included halting electricity payments to Israeli suppliers, a sanction that caused extensive daily blackouts in Gaza.
Abbas also cut wages to civil servants still on the unity government's payroll, a move that deepened economic hardship in an area long underl blockade by Israel.
Hamdallah, accompanied by security men from the West Bank-based Palestinian Authority and Hamas forces, was scheduled to hold talks with Hamas leader Ismail Haniyeh and tour Shejaia, a neighbourhood heavily damaged by Israeli bombardment in a 2014 war with Gaza militants.
On Tuesday, the Palestinian unity cabinet will meet in Gaza.
"The agenda is crowded with ideas and projects," Culture Minister Ehad Bseisso said. "We need to ... push the wheel of reconciliation forward, to create a positive atmosphere."
In addition to setting a date for holding presidential and parliamentary elections, rival factions will have to resolve the issue of the fate of the 40,000 to 50,000 civil and military staff Hamas had hired since 2007.
*This report was edited by Ahram Online.