Rejecting the announcement by Mahmoud Abbas as a "declaration of a coup against the government", Mushir al-Masri, a leading Hamas legislator, urged Palestinians to boycott the vote on Saturday.

Ismail Haniya, the prime minister and a Hamas leader, later met Abbas in Gaza.

Haniya told a press conference after the meeting that he explained to the president "the dangers of the referendum, which could cause historical divisions among the Palestinian people".

Haniya reiterated his party's rejection of the plan and stressed the importance of dialogue to resolve differences.

The prime minister said he would meet Abbas again on Sunday to resume discussions.

Abbas made a televised declaration on Saturday despite pleas by the ruling Hamas party to hold off on the vote and amid rising tensions in the area.

Proposed manifesto

"As chairman of the PLO Executive Committee and president of the Palestinian Authority, I have decided to exercise my constitutional right and duty to hold a referendum over the document of national agreement," Abbas said in a decree read by an aide, adding that the vote would be held on July 26.

Palestinians will be asked to vote "yes" or "no" to the question: "Do you agree with the document of national agreement - the prisoner's document?" the aide said.

The proposed manifesto - drawn up by resistance fighters imprisoned in Israel - implicitly recognises Israel by calling for a Palestinian state on all of the Gaza Strip and the occupied West Bank, which Israel captured in the 1967 Middle East war.

Israel withdrew from the Gaza Strip last year.

National agreement

Abbas told reporters the door would remain open until July 26 for further talks with Hamas on reaching an agreement.

"The referendum is not our goal. The national agreement is the goal and the national agreement is what we want," he said.

Seven Palestinians, including
children, were killed at a beach

Former negotiator Saeb Erikat of Fatah and Sami Abu Zuhri, spokesman of Hamas, respectively defended and opposed the referendum in a live programme on Aljazeera.

On Saturday, the armed wing of Hamas ended a 16-month-old ceasefire with a barrage of rockets into Israel after Israel was blamed for the killing of 10 Palestinians in the Gaza Strip, including three children and their parents at a beach on Friday.

Public opinion

Opinion polls show most Palestinians back the two-state proposal.

Israel has ruled out a complete withdrawal and the proposal's call for the return of millions of refugees and their descendants to what is now Israel.

Ehud Olmert, the Israeli prime minister, told Britain's Financial Times that "the referendum is an internal game between one faction and another".

"It is meaningless in terms of the broad picture of chances towards some kind of dialogue between us and the Palestinians."