Abbas sees unity govt, urges Israel to make peace

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RAMALLAH, West Bank, Nov 11 (Reuters) Palestinian President Mahmoud Abbas said today that he expected to form a unity government with the rival Hamas faction this month in the hope of lifting a Western aid embargo.

Addressing tens of thousands of Palestinians after a week in which rancour soared over bloody Israeli military actions in the Gaza Strip, Abbas called on the Jewish state to talk peace.

''I announce to our people the happy news that we have achieved great progress on the path to establishing a national unity government that can end the siege and open the way toward a political settlement,'' Abbas said in a speech marking the second anniversary of the death of his predecessor, Yasser Arafat.

''I expect that, God willing, this government will see the light of day before the end of this month,'' he said.

The United States and Europe imposed crippling sanctions on the Palestinian Authority when the militant Islamist group Hamas ousted Abbas's more moderate Fatah faction in an election in January. Israel also withheld tax and customs receipts owed to the Palestinians.

Hamas, which advocates Israel's destruction and helped spearhead a Palestinian revolt that erupted in 2000, has refused to soften its stand, prompting Abbas to seek to bring Fatah into the government in a bid to bridge differences.

But Prime Minister Ismail Haniyeh of Hamas said yesterday he was prepared to step aside to end the embargo.

Israel has cautiously welcomed Abbas's efforts, though it insists that any new Palestinian government must recognise Israel's right to exist and renounce violence -- preconditions set by Western power-brokers -- before peace talks can begin.

''There is hope for the moderates, those who believe in a two-state solution,'' Israeli Foreign Minister Tzipi Livni said yesterday.


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