Abbas offers to quit over stalled peace process

RAMALLAH, West Bank (Reuters) - Palestinian President Mahmoud Abbas said Thursday he did not wish to run for re-election in January, voicing disappointment at Washington for "favoring" Israel in arguments over re-launching peace talks.

The 74-year-old PLO leader, in a televised speech, said his decision was not the negotiating tactic some had expected of him. But his phrasing did appear to leave some room for a change of heart. Officials to whom he announced his move earlier in the day said they insisted he must stand as they had no one else.

Abbas, who replaced the late Yasser Arafat five years ago, reserved some of his strongest condemnation for his domestic Islamist opponents Hamas, who beat his Fatah party in a 2006 parliamentary election and then seized control of the Gaza Strip the following year, hamstringing Palestinian national unity.

But he also slammed Israel, whose Prime Minister Benjamin Netanyahu has flatly rejected Abbas's demand that all building in Jewish settlements in the occupied West Bank must cease before peace negotiations can resume after an 11-month halt.

In a mark of the frustration aides say he has felt since U.S. Secretary of State Hillary Clinton agreed with Netanyahu on a visit to Israel last week that settlement expansion should not hold up a return to negotiations, Abbas praised President Barack Obama's administration for promoting peace. But he added: "We were surprised by their favoring the Israeli position."

"I have told our brethren in the PLO ... that I have no desire to run in the forthcoming election," a visibly tense Abbas told a news conference at his Ramallah headquarters.

Earlier he had told the Palestine Liberation Organization's executive committee, not for the first time in recent years, that he did not want to stand again for office. The committee, however, had rejected his offer to step down, officials said.

"This decision is not one of bargaining, or a maneuver, at all," Abbas said. "I hope they understand this position of mine, taking note that there are other steps that I will take."

A man who has made his political career on negotiating with Israel, Abbas said he still believed it was possible to reach a solution in which a Palestinian state would be established alongside Israel.

Abbas faces a dilemma: Washington insists he drop conditions for renewed peace talks with Israel, yet to abandon his demand for a freeze on West Bank settlements may further bolster Hamas.

"I think the aim is to get a strong American position that would define the term of reference for the peace process and that is to establish a Palestinian state on the 1967 borders, without excluding Jerusalem," said George Giacaman, a political scientist at Birzeit University in the West Bank.

"It's a tool of pressure aimed at the Americans and does not mean he will resign in the current circumstances, maybe later."

NO ALTERNATIVE

Aides have said privately in recent days that, despite talk of Abbas making a grand gesture not to seek a second term, he was unlikely to step down, since his Fatah party and the wider PLO, both of which Abbas heads, have no obvious replacement.

Abbas's main opposition, Hamas, has rejected his call for presidential and parliamentary elections to be held on January 24.

Many doubt there will be any vote and should elections happen at all, they would lack legitimacy, many analysts say.

"The president is deeply frustrated because of this American position and because of Israel's insistence on negotiations while expanding settlements," a source close to Abbas said on Thursday. "He wants to quit but we will not allow him -- because we do not have an alternative."

Abbas called the elections last month after failing to conclude an Egyptian-brokered deal with Hamas -- which rejects any peace moves with Israel -- to end the political schism.

In Gaza, Hamas official Sami Abu Zuhri said Abbas's decision to run or not was "internal Fatah business."

Israeli government officials declined comment.

(Additional reporting by Tom Perry in Jerusalem, writing by Alastair Macdonald, editing by Dan Williams)