OCCUPIED JERUSALEM: The top U.N. envoy for Israeli-Palestinian peace hailed improving relations between the two major Palestinian factions Monday, after premier Rami Hamdallah visited Gaza for the first time in two years.

The visit came weeks after an Egypt-brokered deal under which Islamists Hamas, who run the strip, would cede civilian power to Hamdallah's internationally recognized Palestinian Authority (PA).

Multiple previous reconciliation efforts have failed, but the UN envoy for the Middle East peace process, Nickolay Mladenov, told AFP there were real reasons to believe they could buck the trend.

He pointed to the "real political will" from both Hamas and Fatah which dominates the PA, active Egyptian mediation and the focus on smaller confidence-building measures as reasons to be positive.

"I am carefully optimistic, I am not underestimating any of the massive complications and difficulties that can arise along the way," he said.

"But if the region stays engaged, if Egypt's role continues and if the political parties themselves continue to show the willingness they are currently showing to work with us on this process, then it can succeed."

He called for international governments to back a PA-led government in Gaza financially.

"This is an effort to strengthen the forces of moderation in a region that is in the middle of massive turmoil," he said.

"Returning the government back to Gaza strengthens the hand of those who want peace and who want to achieve peace between Palestine and Israel, and who want to do that on the basis of negotiations rather than violence."

Hamas seized Gaza from the PA in 2007 in a near civil war, and the division between the two is seen as one of the greatest obstacles to a meaningful peace process with Israel.

The Palestinian Authority accepts Israel's right to exist, but Hamas does not.

Asked whether the United States would accept reconciliation between Hamas and the PA, Mladenov said it was too early for such discussions.

Washington views Hamas, which has fought three wars with Israel since 2008, as a "terrorist" group.