Palestinian President Mahmoud Abbas moved closer to a showdown with the Hamas government on Tuesday after he called for a referendum on a statehood manifesto that implicitly recognizes Israel.

EU foreign policy chief Javier Solana (L) and Palestinian President Mahmoud Abbas attend a news conference in the West Bank city of Ramallah June 5, 2006. [Reuters]

The referendum, expected in July, will be seen as a confidence vote in the two-month-old government and its policy of refusing to recognize Israel, which has led the West to impose crippling sanctions on the Palestinian Authority.

Although Hamas convincingly beat Abbas's Fatah in January elections, opinion polls suggest most Palestinians support the manifesto which the president is putting to a referendum.

Abbas will meet the executive committee of the umbrella Palestine Liberation Organization (PLO) at 11.00 a.m. (0800 GMT) on Tuesday to discuss setting a date for the vote.

Abbas's office announced late on Monday that he would call the referendum after last-ditch talks with Hamas foundered.

Hamas has rejected the manifesto as it stands and said a referendum would be illegal so soon after the parliamentary election. The Islamic militant group took office in March and have been locked in a power struggle with Abbas ever since.

"We're approaching very tragic days," said Palestinian political analyst Bassem Ezbidi.

Abbas, a moderate, stunned Hamas late last month by giving the group an ultimatum to back the proposal, written by Palestinian prisoners in an Israeli jail, or face a referendum.

Although opinion polls favor Abbas, if the referendum goes against him it would be seen as a vote against Fatah policies of negotiation with Israel. The government might ask Abbas to step down and urge him to call new presidential elections.

The manifesto calls for a Palestinian state on all the land occupied by Israel in the 1967 Middle East war.

The most Hamas has proposed is a long term truce if Israel gives up the West Bank and East Jerusalem, far short of meeting the demands of Israel or Western countries.

Some analysts believe passage of the referendum would allow Abbas to sack the government to remove the sanctions and to clear him to pursue his plan for negotiations with Israel.

With shootouts between Hamas and Fatah now frequent occurrences, many Palestinians fear further violence.

Clashes between Hamas and Fatah gunmen have killed nearly 20 people in the Gaza Strip in the past month.

"Hamas will work on two fronts, it will flex its muscles in Gaza and this could get bloody, or they will boycott the referendum. I think they will favor the boycott," said Ezbidi.

Israel rejects the prisoners' proposal outright. It has long insisted on keeping large Jewish settlement blocs in the occupied West Bank.

Hamas seeks to destroy Israel and has rejected Abbas's calls to hold talks with the Jewish state.

Opinion polls have shown more than three quarters of Palestinian voters support the proposal by the prisoners, who are widely respected in Palestinian society.

Abbas was elected by a landslide in early 2005 in a ballot Hamas did not contest.