The incident cast doubt on his authority as he comes under increasing pressure from Israel to disarm resistance fighters.
Despite the unrest, Abbas said on Thursday that he is confident armed factions will agree to a formal ceasefire at a meeting next week in Egypt.
The incident in Ram Allah on Thursday showed that Abbas faces problems just as serious in his own Fatah, as younger, militant cadres continue to demand a piece of the leadership pie.
More than 1000 Fatah grassroots activists were meeting in the West Bank city when two dozen armed fighters dressed in military-style fatigues, their faces covered, burst into the room in a new hotel where the session was in progress.
The men, from the Al-Aqsa Martyrs Brigades, a resistance group affiliated with Fatah, rampaged through the room and shouted slogans charging the Fatah leadership with complicity in widespread corruption.
Shocked participants ducked and scrambled for the exits as the intruders, brandishing their assault rifles, began throwing chairs around, ordering everyone to leave.
The meeting broke up in disarray, and as the Fatah members fled, the armed men fired in the air outside the hall for several minutes. No one was hurt, but the men made their point: the session did not reconvene.
Armed factions pose a challenge
to President Abbas' authority
"Our demands are for change and reform," Munawar al-Aqra, an al-Aqsa commander in Ram Allah, said. He added that his group would not disarm, though it remains loyal to the Palestinian Authority.
Abbas and his top aides were nowhere near the meeting, but the message was loud and clear: Abbas may have the old-time Fatah institutions behind him, but at the lower, younger levels, the picture is one of turmoil and competition.