Mahmoud Abbas and about two dozen officials from various factions met behind closed doors for around three hours on Sunday in Abbas' office in Ramallah.

They met to discuss a document drawn up by Palestinian leaders who are imprisoned by Israel.

Abbas has endorsed the document that is based on previous Arab peace initiatives and calls for the creation of a Palestinian state alongside Israel and for Israel to withdraw from territories, including East Jerusalem, that it captured in the 1967 war.

Hamas has objected to the document, and officials close to Abbas said they doubted whether the governing Islamist faction would agree to change its charter that calls for the destruction of Israel.

"This is a dialogue of the deaf," one official told Reuters.

Ultimatum

To force Hamas to soften its position, Abbas urged the group to accept a proposal and said that if no agreement was reached after 10 days of talks he would call a referendum on the proposal.

Yasser Abed Rabbo, an adviser to Abbas, said that starting on Monday, the delegations would meet in Ramallah and Gaza twice daily over 10 days to come up with a formula to win back international support and revive Palestinian-Israeli peace talks.

"There is an atmosphere of optimism, we hope to reach positive results"

Nasser al-Shaher, Hamas

"Ten days starting tomorrow is enough, after which I will have no option but to return to the Palestinian people to carry out a referendum," Abed Rabbo quoted Abbas as telling Sunday's preliminary meeting.

Abbas said failure to find a way out of the impasse would push the Palestinians deeper into economic and social difficulties.

He is trying to end a power struggle between his Fatah movement and Hamas that has intensified since the Islamic group scored a surprise electoral victory in January.

Progress

The deputy prime minister and Hamas official, Nasser al-Shaher, said progress had been made.

"There is an atmosphere of optimism, we hope to reach positive results."

Hamas received a boost before the talks when the the Popular Front for the Liberation of Palestine announced it was willing to join the Hamas-led coalition government.

The PFLP, which has three seats in the 132-member parliament, refused to join the Hamas govenrment in March over Hamas's failure to recognise the supremacy of the Palestine Liberation Organisation (PLO), led by Abbas.

Meanwhile, Israel has not responded to the prisoners' plan and has pledged to set its borders with Palestinian territory unilaterally unless peace talks can be resumed within months.

Israeli government officials said the prime minister, Ehud Olmert, would meet Egyptian President Hosni Mubarak in the Red Sea resort of Sharm al-Shaikh on June 4.

Mubarak wants Olmert to restart peace talks with Abbas. Olmert has said he will try to reach a peace agreement through negotiations.