Palestinian leader Mahmud Abbas (R) and Prime Minister Ismail Haniya meet in Gaza City. -Xinhua/AFP

Palestinian President Mahmoud Abbas and Prime Minister Ismail Haneya agreed yesterday to continue talks over a statehood proposal in a bid to bridge differences and avoid a showdown in a coming referendum.

Haneya, who is also a senior leader of the now ruling Islamic Resistance Movement (Hamas), told reporters after a meeting with Abbas in Gaza that they agreed to continue a national dialogue over the proposal in order to overcome differences.

Describing the meeting with Abbas as "positive", Haneya said, "We have agreed on finding practical ways to overcome current differences, and we hope that the Palestinian people will soon see the positive and fruitful outcomes of these meetings with our brother Mahmoud Abbas."

"We are complying with the national dialogue between the Palestinian powers, hoping that it will come out with political accords and approaches toward a united Palestinian attitude to face internal and external challenges," he added.

Meanwhile, Haneya also agreed to withdraw a recently-formed security force under Hamas control from the streets of Gaza.

Dispute over security control has led to fierce clashes between Hamas supporters and regular security forces loyal to Abbas' Fatah movement with over a dozen people killed in the past month.

Wednesday's meeting was the start of a new round of inter-Palestinian talks that is expected to last seven days.

The talks are aimed to reach an agreement among Palestinian factions in a bid to avert a referendum on the statehood proposal.

The document calls for the establishment of an independent Palestinian state on the territories seized by Israel in the 1967 Arab-Israeli war. It is seen as implicitly recognizing the Jewish state.

Last week, Abbas issued a presidential decree to hold a referendum on the proposal on July 26, but he stressed that talks would continue and the public vote would not proceed if agreement was achieved.

Hamas, whose charter formally calls for Israel's destruct, has so far rejected the proposal and opposed the referendum.

The Islamic group took the reins of the Palestinian government in late March after a sweeping election victory in January.