President Abbas's referendum threat came on the first day of cross-party talks aimed at drawing a line under divisions between his Fatah movement and the Islamists of Hamas who now head the government after winning January elections.
The meeting of leaders in Ramallah was called in the face of an upsurge in violence between Fatah and Hamas that has left 10 people dead since the beginning of the month. As expected, both Mr Abbas and Hamas Prime Minister Ismail Haniya urged armed groups to stop turning their guns on each other.
But Mr Abbas's warning that they had 10 days to agree on a common platform or he would submit to referendum a proposal from jailed faction leaders on how to end the Palestinian crisis caught everyone off guard. "If not, I will submit the document to a referendum in 40 days," he said.
The initiative drawn up by the jailed faction leaders and made public earlier this month sets out ways to "preserve Palestinian unity". The blueprint proposes that activities be "confined to the territories occupied in 1967" – a statement which could signal an end to attacks inside Israel – and calls for the creation of a national unity government.
It also advocates an independent state in territory occupied by Israel in the 1967 Middle East war, incorporating the whole of the West Bank, Gaza Strip and east Jerusalem. If Hamas were to accept the document, it would imply recognition of Israel's right to exist, even though Hamas’ charter calls for the destruction of the Jewish state.
In an initial reaction from Hamas, its speaker of parliament Aziz Dweik said that "we accept the right of the Palestinian to determine their fate." But the movement's chief spokesman, Sami Abu Zuhri, gave the idea a cooler reception, saying it was "premature."
"It represents an attempt to apply pressure with the aim of imposing a certain vision and conditions on the dialogue," Abu Zuhri told news agency AFP and Islamic Jihad, the most extreme of the armed factions, dismissed the idea, "We reject this referendum of the masses because it could wind up strategically hurting the Palestinian cause," Khaled el-Batsh said.
If a referendum were to proceed its likely that the blueprint would win approval, the latest survey by the Ramallah-based Near East Consulting group showed 80 percent of Palestinians support the prisoners' agreement.
Israel offers weapons
In another unexpected move, Israel said it had decided to authorise deliveries of light weapons and ammunition to security forces loyal to the President, Mahmud Abbas. "(Defence Minister Amir) Peretz has decided jointly with Prime Minister Ehud Olmert to authorise the transfer of light arms and ammunition to forces loyal to Abu Mazen (Abbas)," a defence ministry official told AFP.
"At issue are several hundred weapons imported from foreign countries which will be transferred under tight control by us. We will know exactly to whom and where they are being delivered."
But Mr Abbas's spokesman Nabil Abu Rudeina rejected Israel’s announcement, saying the "announcement made by the Israeli defence ministry is false," without giving further information.
The tension between the Palestinian factions, Fatah and Hamas, has been mounting steadily since Hamas won convincingly January elections. Much of the rivalry has been centred on control of the security services which remain the remit of Mr Abbas as president of the Palestinian Authority.
But Hamas has rolled out its own rival paramilitary force on the streets of Gaza, where the two sides have engaged in deadly gunbattles. Even as the conference met, 12 Palestinians were wounded in scattered clashes in Gaza City between Hamas paramilitaries and official security forces.