Palestinian factions seek agreement to avoid vote

GAZA, June 17 (Reuters) Rival Palestinian factions tried today to hammer out an agreement that might avoid a referendum showdown between President Mahmoud Abbas's Fatah movement and governing Hamas Islamists.

A deal between the groups, caught in an increasingly violent power struggle, could prompt Abbas to abandon plans for a July 26 ballot on a statehood proposal that implicitly recognises Israel.

Hamas, whose charter calls for Israel's destruction, brands the referendum an attempt to overthrow its elected government.

''If we agree, that's better for us and for the Palestinian people, and there won't be any need for the referendum,'' Abbas said during a visit to Cairo.

Meeting in Gaza, factions said they were close to reaching agreement on a political platform that they could all accept.

It would be based on the proposal, first drawn up by prisoners in an Israeli jail, that Abbas plans to put to a referendum.

''The national dialogue is developing into an agreement and within two days there will be a signing on the prisoners' document which will become the national consensus,'' said parliament speaker Aziz Dweik, who is from Hamas.

But it was not certain that Hamas would openly soften its stand on Israel -- a condition for Western countries to lift an aid embargo that has brought the Palestinian Authority near collapse since Hamas took office in March.

AID SCHEME The European Union agreed yesterday on an aid scheme for Palestinians that bypasses the government and the United States said it was close to ''substantial agreement'' on the plan.

Abbas said the EU's plan was a good step but inadequate.

''The mechanism is not clear and is not complete and will lead to abolition of the role of the government and the PA (Palestinian Authority,'' he said according to the official MENA news agency.

The struggle between Fatah and Hamas has intensified since Hamas trounced Abbas's long dominant party in January elections.

While Fatah wants a Palestinian state on land that Israel occupied in 1967, Hamas ultimately wants an Islamic state on all of what is now Israel, the West Bank and Gaza Strip.

Weeks of skirmishing between rival gunmen in Gaza have left about 20 dead.

A Fatah spokesman hoped that an agreement between the factions could lead to a dramatic improvement in the situation.

''The atmosphere is positive but nobody should pre-empt the final result,'' said Tawfiq Abu Khoussa.

One faction leader said that the main sticking point was over who would run negotiations with Israel.

Agreement on the document might also pave the way for the formation of a national unity government, which might have better success than Hamas in easing foreign sanctions.

Hamas has resisted the demands of Western countries to recognise Israel's right to exist, renounce violence and accept past peace accords.

REUTERS MP PC2231