Leaders of rival Palestinian movements of Fatah and Hamas agreed on an immediate ceasefire in northern Gaza Strip, a spokesman for President Mahmoud Abbas' Fatah movement announced on Thursday night.

Abdel Hakim Awad told reporters that "it was agreed to immediately end armed fighting, pull out all militants from the streets and exchange persons kidnapped earlier on Thursday."

The decision was made during an urgent meeting between leaders of the two sides held at new Interior Minister Hani al-Qawasmi's home in Gaza City, Awad said.

He added that the aim of the meeting was to end the inter-Palestinian fighting that erupted in northern Gaza Strip on Wednesday and Thursday.

The deal was reached shortly after a two-year-old boy was killed and his grandmother moderately injured on Thursday night as clashes between rival Fatah and Hamas militants renewed in northern Gaza Strip.

Witnesses said militants of the two movements traded fire in an area of northern Gaza Strip town of Beit Lahiya, near the homes of two senior Fatah militants but gunshots hit a next-door house in the neighborhood, killing Hassan Abu Nadda and wounding his 65-year-old grandmother Um Basel Abu Nadda.

A power-sharing agreement signed by Fatah and Hamas in Saudi holy city of Mecca last month temporarily ended months of infighting and a new coalition government was sworn in on March 17.

However, clashes resumed earlier this week, killing four Palestinians and wounding 10 others during clashes between the two rival movements in northern Gaza Strip in the past three days.