Abbas may resign if embargo continues-ally

RAMALLAH, West Bank, May 4 (Reuters) President Mahmoud Abbas told allies yesterday he might resign in two months if Western sanctions on the Palestinian government were not lifted, a senior official said today.

The comment may increase pressure on Western powers keen to bolster Abbas at the expense of the Hamas Islamist party that won an election last year and leads the Palestinian government.

Abbas toured European and Arab capitals last month in a bid to ease an aid embargo and other economic sanctions imposed in response to Hamas's refusal to renounce violence or recognise Israel.

''In the next two months, if the siege is not lifted, then Abu Mazen may resign,'' the official, a leading figure in Abbas's secular Fatah faction, told Reuters.

Abbas's office had no immediate comment.

Abbas, popularly known as Abu Mazen, made the remark at a meeting of senior Fatah officials yesterday. It is unclear whether resigning is a serious option under consideration by Abbas or merely a negotiating gambit.

Resignation could trigger an election which many fear could turn into a bloody showdown between Hamas and Fatah militants.

Abbas hoped to ease factional fighting and persuade Western nations and Israel to end sanctions that have crippled the Palestinian economy by forming a unity coalition government in March, including Fatah ministers under Prime Minister Ismail Haniyeh of Hamas. The embargo, however, goes on.

''He is very frustrated at the continuation of the siege. He hoped by forming the unity government the sanctions would be eased. That is not happening. He is very frustrated.'' PRESIDENTIAL ELECTION Deputy Prime Minister Azzam al-Ahmad, a Fatah leader, said on April 30 the unity government should be disbanded if the embargo were not lifted within three months.

Abbas's long-running threat to call an election faded after he agreed to form the unity government with Hamas.

But a recent update to the Palestinian voter rolls, and increased US funding for political ''party strengthening'' programmes, has stoked suspicions within Hamas's ranks that the Fatah leadership may be preparing to push for a snap election.

The Bush administration informed Congress in March that it was setting aside 1.7 million dollars to bolster the Palestinian Central Elections Commission, an independent body whose top members are appointed by Abbas.

Prime Minister Ismail Haniyeh, a Hamas leader, said the militant group would reassess its options in one to two months if sanctions remained in place. Haniyeh did not say that disbanding the government was one of those options.

Hamas leader Khaled Meshaal said this week Israel could face another Palestinian uprising unless conditions in the Gaza Strip and occupied West Bank improved.

Senior US officials, speaking on condition of anonymity, said prospects for holding early elections could be increased if non-Hamas ministers resigned en masse. Abbas could then rule by decree for up to one year until elections were held, they said.

Reuters KK VV1733