Abbas urges Hamas to respect deals, warns Israel

RAMALLAH, May 15 (Reuters) Palestinian President Mahmoud Abbas today urged Hamas to renounce violence and respect peace agreements, but also warned Israel that taking a unilateral approach to peacemaking would fuel extremism.

In a speech to mark the anniversary of the founding of the state of Israel, a day Palestinians call Nakba, or the great catastrophe, Abbas said Hamas, the Islamic movement that heads the Palestinian government, should honour existing peace deals.

Without referring directly to Hamas, he said Palestinians should not be satisfied with ''fiery speeches and slogans that could bring about international isolation''.

Such speeches, he said, ''more dangerously make us fall into the trap that Israel wants, which is to reject negotiations using the excuse that there is no Palestinian partner''.

Abbas also warned Israel that unilaterally setting ''final borders'' with a Palestinian state, a policy Prime Minister Ehud Olmert has pledged to carry out by 2010 if peace talks cannot be resumed, risked provoking a deeper spiral of violence.

He also called on the Jewish state to release tax revenues that it collects on the Palestinians' behalf, around 55 million dollars a month, which have been withheld since Hamas came to power in March following an election victory over Abbas' Fatah group.

''As for Israel, we call on it to release our withheld funds and to backtrack on unilateral solutions because it will kill the peace process forever and will ignite the region and increase extremism,'' he said.

Abbas's speech, pre-recorded as the Palestinian Authority president is on a visit to Russia, was broadcast live on Palestinian television and radio in the West Bank and Gaza.

Crowds gathered in the centre of Ramallah, administrative capital of the occupied West Bank, to listen to the speech over loud speakers after standing in silence as sirens wailed to mark Nakba Day, an annual Palestinian day of mourning over Israel's establishment 58 years ago.

Arab states attacked Israel the day after it was proclaimed on May 14, 1948. During the war, hundreds of thousands of Palestinian Arabs fled or were driven from their homes in what is now Israel.

''USELESS ROCKETS'' Tensions between Abbas's Fatah movement and Hamas have increased sharply since Hamas came to power, while Israel has effectively broken off all communication and financial links with the Hamas-led government.

Israel, the United States and the European Union consider Hamas, sworn to Israel's destruction, as a terrorist group and have severed ties. Local, regional and international banks have stopped dealing with the government, fearing US sanctions.

The Hamas-dominated administration now not only has virtually no income but has inherited government coffers that it says were already 1.3 billion dollars in debt.

In recent weeks, Palestinian militants in the Gaza Strip have repeatedly fired home-made rockets into Israel, causing damage and occasional injury. In response Israel has bombarded Gaza with artillery, killing militants and some civilians.

Abbas called on Palestinians to ''stop firing useless rockets which give Israel the excuse to escalate its aggression against our people in the Gaza Strip''.

He also put himself forward again as a partner for peace, saying he remained ready to talk to Israel.

''We want to make a just and permanent peace with you,'' he said.

''Let's make this year the year of peace, let's sit at the negotiations table away from the policy of dictations and unilateralism. Stop making excuses there's no Palestinian partner, the partner is there.'' REUTERS SHB BST1608