Bassam al-Salhi, a lawmaker from leftist coalition al-Badiel, told Palestinian radio Voice of Palestine that "there is a serious danger in the battle between Hamas-led cabinet and Palestinian leadership."

"I think that due to increasing conflicts and differences between the two sides, the Palestinian political structure will collapse," said al-Salhi.

He urged Hamas and Abbas-led Fatah movement to stop blaming each other for the current financial crisis which deteriorated with the European Union and the United States suspending aid to the Palestinian government after Hamas defied their demand to renounce violence and recognize Israel.

"We won't wait until both of them drag us to abyss. This conflict is unjustifiable," he said.

Meanwhile, Palestinian chief negotiator Saeb Erekat urged the Hamas-led government to heed the call by Arab League secretary general Amer Mousa for Hamas to accept the 2002 Arab peace initiative.

Palestinian Foreign Minister and a Hamas leader Mahmoud al-Zahar told reporters after a meeting with Moussa in Cairo on Saturday that he would convey the appeal to his government, but noted that Israel has yet to accept the Arab peace plan.

Under the plan, Arab countries will normalize relations with Israel in return for withdrawal from all Arab territories occupied in the 1967 Mideast war and creation of an independent Palestinian state with Jerusalem as its capital.