* Palestinian leaders meet face-to-face in Cairo
* Recent thaw in relations has produced scant progress
* Disputes over elections and prisoner release persist
CAIRO/GAZA, Jan 9 (Reuters) - An Egyptian official said the leaders of the Palestinian Hamas and Fatah factions had agreed at talks in Cairo on Wednesday to implement a long-delayed reconciliation pact, although it was unclear if the deal would extend beyond holding more talks.
President Mahmoud Abbas of the secular Fatah movement based in the West Bank and Khaled Meshaal of the Islamist Hamas group that controls the Gaza Strip met face-to-face for the first time in over a year to discuss how to implement their 2011 deal.
The rivals fell out badly when Hamas seized control of Gaza from Fatah by force in 2007. But they have drawn closer since Israel's assault on Gaza in November, in which Hamas claimed victory, and a diplomatic win by Abbas the same month in which the United Nations voted to recognise Palestine as a "non-member state".
"It was agreed that sides would begin immediately to implement the previously agreed mechanism of the agreement signed," a senior Egyptian official involved in the talks, who declined to be named, told Reuters by phone from Cairo.
Nabil Abu Rdaineh, a senior aide to Abbas, said the president had held a lengthy meeting with Meshaal in a "positive atmosphere". He said there was an agreement to hold more meetings, but declined to give details. No comment was immediately available from Hamas.
The two sides have signally failed to put into practice the deal they signed in Cairo in May 2011 to reunify the leadership of the Israeli-occupied Palestinian territories.
The Egyptian official said discussions to find ways to do so had been held in a "positive spirit", and that the rival factions would meet again in the first week of February to work out a timetable.
Egyptian mediators had hoped to coax Abbas and Meshaal into a meeting with Egyptian President Mohamed Mursi, but in the event they met without Mursi. Abbas is reluctant to accept any format that would imply giving the Hamas leader a status equivalent to his own.
Much of the tension between the groups stems from their competing approaches to talks to try to end Israeli occupation. While Hamas fundamentally rejects Israel's right to exist, but says it might consider a long-term ceasefire, Abbas rejects violence and is prepared to talk peace on certain conditions.
The two groups have also traded blame over continued arrests of Hamas members by Fatah in the West Bank, and of Fatah members in Hamas-controlled Gaza.
On Tuesday, a Hamas court sentenced a senior Fatah armed activist, Zaki al-Sakani, to 15 years in prison for possession of weapons, according to Hamas security sources. A Fatah official described the verdict as a blow to reconciliation.
The Egyptian-drafted agreement of 2011 called on Fatah and Hamas to form a unity government that would oversee an election and reform Abbas's Palestine Liberation Organisation to include Hamas and the less influential Islamic Jihad group.
Abbas says Hamas is obstructing election registration in Gaza, while Meshaal says the pact needs to be implemented as a whole, with Hamas prisoners in West Bank jails released.
A senior Hamas official in Gaza accused Abbas of dragging his feet on reconciliation because he was still hoping for a renewal of stalled peace talks with Israel.
"Our information showed that President Abbas would head towards reviving negotiations with the occupation (Israel) when the election in Israel is finished," Salah al-Bardaweel said in a statement.
Israel is holding a parliamentary election on Jan. 22.
It has criticised Palestinian unity efforts, fearing that grassroots support for Hamas, deemed a terrorist group by the Israel and Western governments, could overwhelm Abbas's administration, which has long renounced violence.
"They are exploring a possible unification, between Fatah and the terrorists who wanted to destroy the state of Israel and who launched rockets on our towns," Israeli Prime Minister Benjamin Netanyahu said on Wednesday.
"We know, therefore, that any land that we vacate will be seized by Hamas and Iran and we will not let this happen."