SCENARIOS: Outlook for Palestinians' muddled politics

RAMALLAH, West Bank (Reuters) - Palestinian leader Mahmoud Abbas says he does not want to run for a second term as president in a January election, though many observers doubt the poll will even happen.

Leaving room for a change of heart, Abbas's declaration has muddled a Palestinian political picture already complicated by a deep division between the dominant Fatah and Hamas movements.

Following are some scenarios showing how Palestinian politics may play out in the next few weeks and months:

ELECTIONS Canceled, PLO COUNCIL EXTENDS ABBAS TERM

Many observers expect the presidential and legislative elections scheduled for January 24 to be postponed. Hamas, which disputes Abbas's legitimacy, has banned participation in the Gaza Strip. Israel has not yet said whether it will allow voting in East Jerusalem.

An independent Palestinian election commission is due to tell Abbas next week whether or not it is viable to hold the election. The negative answer many observers expect would likely result in the postponement of the election by the central council of the Palestine Liberation Organization (PLO), which is dominated by the Fatah movement led by Abbas. Hamas is not a member of the PLO.

The PLO council would then be likely to extend Abbas's term as president of the Palestinian Authority. Both the PLO and Fatah have declared that they want Abbas to stay on as president.

There is a precedent for such a move. In 1999, the same council extended the presidency of the late Yasser Arafat.

The council also has the authority to extend the term of the Palestinian Legislative Council, which expires on January 25. The fact that Hamas currently holds a majority in the council might lead the Fatah-dominated PLO to dissolve the body. Such a move would be rejected by Hamas. The PLC has not met since Hamas won a brief war for control of Gaza in 2007. Before that, Israel arrested many members of the Hamas majority elected in 2006.

ELECTIONS Canceled, PLO DISSOLVES PALESTINIAN AUTHORITY

The PLO central council, which approved the creation of the Palestinian Authority in 1993 after interim peace deals with Israel, also has the power to dissolve it, rendering meaningless any talk of elections for its leadership. In such a scenario, the Palestinian Authority's powers would be restored to the PLO.

Abbas, as head of the PLO, would stay at the heart of Palestinian politics. He will remain head of the PLO until his death, incapacitation or removal by the Palestinian National Council, also known as the PLO parliament.

Those who support such a move argue that it would force Israel to assume all responsibilities as the occupying power in the West Bank and Gaza Strip. It handed over some local powers in the cities to the PA under the early 1990s Oslo accords.

However dissolving the Palestinian Authority, which has 160,000 employees who support in turn much of the population, could also result in chaos in the Palestinian territories.

HAMAS SIGNS RECONCILIATION PACT, ELECTIONS GO AHEAD An Egyptian proposal aimed at reconciling Hamas and Fatah slated legislative and presidential elections for June 2010. Abbas has signed the document but Hamas decided not to, citing reservations. Were Hamas to sign, the elections would be postponed from January to June, in line with the Egyptian proposal. However, for now, the prospects of Hamas signing are dim, despite some Hamas voices suggesting the party should.

ABBAS STEPS DOWN

Were Abbas to actually step down before January, Hamas would likely declare Aziz Dweik, a Hamas member, as president. Hamas still considers Dweik speaker of the PLC and according to the law, whoever occupies that post should assume the presidency in the event of it being vacated. Fatah, however, says Dweik's term ended a year after he assumed the post in 2006.

This scenario is not viewed as likely. (Compiled by Nidal al-Mughrabi in Gaza and Ali Sawafta and Mohammed Assadi in Ramallah; Writing by Tom Perry in Ramallah; editing by Alastair Macdonald)