The announcement comes shortly after Gaza's rulers unveiled a new, seemingly more pragmatic political program aimed at ending the group's worldwide isolation.
The six-page outline supports the creation of the Palestinian state in the West Bank and Gaza Strip within the 1967 borders.
"The Hamas Shura council on Saturday elected Ismail Haniya as head of the movement's political bureau", the Hamas media said.
The group maintains a sizeable armed wing in the Gaza Strip since seizing the coastal territory in 2007 from the rival Fatah party, which is based in the West Bank and has fought three wars with Israel.
The Palestinian movement Hamas has elected Ismail Haniyeh to lead its political office.
Haniyeh's election came only few days after Hamas issued its new political platform, which generated confusion and was rejected on Saturday by the Islamic Jihad Movement.
In 2006, after Hamas won the legislative elections, Haniyeh was chosen by the movement to form its first government.
"It's my honour to shoulder the responsibility of leading the political bureau of this large movement of holy resistance", Haniyeh said after arriving at the tent in downtown Gaza City.
This new position from Hamas comes from a new document labeled, "A Document of General Principles and Policies", which highlights a set of changes to the original Hamas charter of 1988.
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Since quitting his longtime base in Damascus in 2012, Mashaal has mostly lived in lavish suites in the capital of the oil rich gulf state of Qatar.
Egypt has outlawed the Brotherhood as a "terrorist group" and banned its activities following the ouster of the Islamist president Mohamed Morsi in 2013.
CNN's headline said: Hamas says it accepts '67 borders, but doesn't recognize Israel.
Recently, United States President Donald Trump has vowed to revive the stalled Israel-Palestine peace process by acting as a "mediator, an arbitrator or a facilitator".
Moreover, by the announcement, Hamas may have wanted to show a delink from the pan-Arab Muslim Brotherhood movement and draw a distinction between Palestinians' struggle against Israel.
"I think Hamas will be more in (Gaza) and less out", said Hroub, a political scientist at Northwestern University's Doha campus. Although both Egypt and Israel have operated against these tunnels the Israeli army says Hamas continues to build new tunnels as well as to stockpile weapons for a future clash with Israel.
The announcement caps several months of voting among Hamas' far-flung members in Gaza, the West Bank, Israeli jails and overseas to select a replacement for Meshaal, who sought to step down.
Haniya and Yassin escaped death in 2003, in a failed Israeli assassination attempt in the form of air raids on an apartment bloc in downtown Gaza where the two men were meeting.
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