Abbas resignation over sanctions denied

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

However, an aide to Abbas denied he had made such comments.

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

A leading figure in Abbas's secular Fatah faction said the president, popularly known as Abu Mazen, told senior officials from his party on Thursday of his plan.

''In the next two months, if the siege is not lifted, then Abu Mazen may resign,'' the official told Reuters.

A resignation could increase pressure on Western powers keen to bolster Abbas at the expense of the Hamas Islamist party that leads the Palestinian government after a 2006 election. As such, talk of resigning could be part of a negotiating strategy.

Nabil Shaath, a member of Fatah's Central Committee and a close aide to Abbas, denied the president had discussed resignation.

''Calling for a new election is not in our policy. We are committed to the government of national unity.'' Resignation could trigger an election which many fear could turn into a bloody showdown between Hamas and Fatah.

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.

''(Abbas) is very frustrated at the continuation of the siege,'' said the senior official who spoke anonymously. ''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 SM DB2231