Palestinian President Mahmud Abbas (L) gestures along with Mohammed Subeh during a national dialogue conference with other leaders in Ramallah May 25, 2006. (Xinhua/AFP)

Palestinian President Mahmoud Abbas called during a national dialogue on Thursday for a referendum on a proposal seeking a negotiated settlement with Israel as fresh clashes erupted between Hamas and Fatah supporters in Gaza City.

Addressing the two-day national dialogue which kicked off in Gaza and the West Bank city of Ramallah on Thursday, Abbas said, "I would like to say frankly that the time and situation are unbearable, so I will put the document for referendum within 40 days."

"This is not a threat, but you have to decide (on the document) within 10 days, all of us are responsible. Within 40 days, we will ask the people to decide," he added.

The document dubbed "National Accordance" refers to a proposal reached earlier this month by prominent Palestinian leaders from several factions including Fatah, the Islamic Resistance Movement(Hamas) and the Islamic Jihad (Holy War), who are jailed in an Israeli prison.

The proposal supports resistance against the Israeli occupation as well as a negotiated settlement to the Palestinian-Israeli conflict.

It also calls for the formation of a Palestinian national unity government, demands Israel to withdraw to borders before the 1967 Mideast war and calls for an independent Palestinian with Jerusalem as capital and a just solution to the issue of Palestinian refugees.

Abbas' call for a referendum, an unexpected move to many, came as Palestinian factions are engaged in talks designed to defuse tensions between rival Hamas and Fatah over security control in the Gaza Strip and tackle a deepening financial crisis that might lead to a humanitarian disaster on the Palestinian territories.

"President Abbas' statements were like a bomb that exploded in the middle of the parties as they started their dialogue," said Mohamed Abu Zareefa, a Gaza-based Palestinian observer.

"It is hard to say whether the referendum will be conducted or not, but let's see the final results of the national dialogue," he said.

"Going for a referendum is not easy since it will need the approval of all parties and also much preparation," he added.