By Nidal al-Mughrabi - Reuters - GAZA, Dec 2, 2006 

Palestinian President Mahmoud Abbas said on Saturday he was considering options open to him after the failure of talks with the governing Hamas faction over creating a unity government with the militant group.

Coalition talks between Hamas and Abbas`s Fatah group broke down weeks ago amid Hamas`s refusal to meet Western demands that a unity government renounce violence and recognise Israel and past peace agreements with it, as well as other disagreements.

"It is known why the dialogue to form a government has stopped, therefore I do not want to get in to the details and the options which are in front of us and which we are studying seriously," Abbas said, without elaborating.

Hamas, which is sworn to Israel`s destruction, won Palestinian elections in January, trouncing Fatah, but has been unable to govern effectively due to aid cuts from Western powers who have demanded it change its stance on the Jewish state.

Senior Hamas lawmaker Mushir al-Masri blamed Abbas`s administration for the breakdown in coalition talks, citing differences over the appointment of key ministerial posts. He said Abbas aimed to "strip" everything from Hamas.

"The president of the Authority has no options to take," he told a pro-Hamas Web site. "Neither Abbas nor any Palestinian or international party has the ability to move the Palestinian government from its place."

Palestinians hope foreign powers, which include the United States and the European Union, will renew funding to the Palestinian Authority if a unity government is formed.

CHANCE WASTED

The aid freeze has led to a worsening of humanitarian conditions in the Palestinian Authority, already bogged down by Israeli restrictions and most recently, a five-month-long offensive in the Gaza Strip against Palestinian militants.

Aides to Abbas said he could dismiss the Hamas-led government and form an emergency administration or call a referendum on early elections.

Abbas made his comments after discussing the situation at separate meetings with European Union foreign policy chief Javier Solana and the foreign ministers of Austria and Germany.

Solana said by refusing to accept the terms set by the international community for a viable unity government, Hamas had wasted a chance to have the sanctions lifted.

"Some conditions have to be met in order to have full cooperation with the international community and the president (Abbas) has made tremendous efforts," Solana said.

"It has been impossible for the moment to get these conditions accepted (by the Hamas government) and therefore the situation (sanctions) will continue, but everybody has to know who is responsible ... It is not the president," he said.

Hamas earlier dismissed a call for the resignation of Prime Minister Ismail Haniyeh by the Palestine Liberation Organisation, a body headed by Abbas and dominated by Fatah.

"Hamas rejects the statement of the PLO Executive Committee which is a call for a coup against the legitimate Palestinian government," Hamas official Ismail Rudwan said.