GAZA CITY, Gaza Strip — Tens of thousands of Fatah supporters rallied in the Hamas stronghold of Gaza on Friday for the first time since they were routed from power in the territory by the Islamist militants in 2007.

The rally, approved by Gaza's Hamas rulers, marks a renewed attempt by the rival Palestinian factions to show unity after a fierce Hamas battle with Israel in November and Fatah's subsequent recognition bid at the United Nations.

But many obstacles remain before the sides can settle their differences, chief among them how to deal with Israel. Several rounds of reconciliation talks in recent years that centered on finding ways to share power have failed to yield results.

Still, both sides expressed optimism after Friday's rally, during which Fatah loyalists waved yellow flags, danced in the streets and chanted party slogans. For years, Fatah loyalists in Gaza faced retribution from the Hamas government, which banned them from gathering.

"We feel like birds freed from our cage today," said Fadwa Taleb, 46, who worked as a police officer for Fatah before the Hamas takeover and attended Friday's rally with her family. "We are happy and feel powerful again."

Top Fatah officials arrived in Gaza for the first time since they were violently ousted. Palestinian President Mahmoud Abbas, who rules the West Bank, did not attend the event, but he addressed the crowd on a large screen telling them "there is no substitute for national unity."

Hamas Prime Minister Ismail Haniyeh also expressed hope the two factions could reconcile. Ihab al-Ghussian, chief spokesman for the Hamas government in Gaza, said the sides would "work toward the consolidation of national unity."

After the rally, Haniyeh called Abbas to congratulate him and Abbas in turn thanked Haniyeh for letting it happen, said Haniyeh spokesman Taher al-Nunu.

The warmer tone is a result of recent gains by both factions.

Abbas has enjoyed a boost in status since he led the Palestinians' successful bid to upgrade their status at the United Nations to a nonmember observer state.

On Friday, he signed a presidential decree officially changing the name of the Palestinian Authority to the "State of Palestine." All Palestinian stamps, signs and official letterhead will henceforth be changed to bear the new name, according to the official Palestinian news agency, Wafa.

The move marked the first concrete, albeit symbolic, step the Palestinians have taken since the November decision by the United Nations.

Hamas, meanwhile, has gained new support among Palestinians after eight days of fighting with Israel in November, during which Israel pounded the seaside strip from the air and sea, while Palestinian militants for the first time lobbed rockets at Jerusalem and Tel Aviv.