Mr Abbas cited 'my responsibility before this nation and before history' in taking his biggest decision since the signing in 1993 at the White House of the ill-fated Oslo Agreement, which launched Palestinian rule in the West Bank and Gaza Strip. He said Palestinian agreement to the document, to be voted on next month, held the key to 'saving this people from the disaster' of international isolation and worsening economic crisis that ensued from the radical Hamas movement's forming of a government in April.

But Hamas leaders say that rather than save the Palestinians, the referendum has a less noble purpose: ousting them from power they gained democratically and putting Mr Abbas' old guard Palestine Liberation Organisation (PLO) associates back in key positions. 'In Gaza there are already many pressures between Fatah and Hamas,' said Mahmoud Ramahi, a Hamas member of parliament. 'We think a referendum can create, can initiate a civil war in Gaza.'

Fatah-Hamas violence intensified on Monday night as Fatah militants set fire to the parliament building and cabinet offices in Ramallah after Hamas supporters sought to storm a compound in Gaza of the Fatah-dominated Preventive Security Service.

Mr Abbas said that agreement on the document, either through Fatah negotiations with Hamas, or by a yes vote in the referendum on July 26, would bring an end to the international sanctions that had left most of the Palestinian Authority's 165,000 workers unpaid for more than three months. 'We have to be rid of the huge pain that this people is living, that we are all living,' he said.

One of Mr Abbas' old PLO associates, Yasser Abed Rabo, said the president viewed the looming collapse of the Palestinian Authority coupled with Israeli Prime Minister Ehud Olmert's plan to unilaterally annex parts of the West Bank as threatening to erase a life's work of building institutions and gaining international support for the Palestinian cause.

Mr Abed Rabo, a member of the PLO executive committee, said Hamas' refusal to recognise Israel or take the less dramatic step of accepting the document drafted by senior Palestinian prisoners is enabling Mr Olmert to argue there is no partner for peace negotiations. The 18-point document calls for a national unity government and for establishing a Palestinian state in the territories occupied during the 1967 Middle East war. Hamas rejects the document's reference to 'Arab legitimacy', a phrase it associates with a 2003 Arab League peace plan that recognised Israel in exchange for a full Israeli withdrawal from the occupied territories. Israel has also dismissed the document, saying it aims at a return of Palestinian refugees that would destroy the Jewish character of the Israeli state.

'Maybe there is a personal factor at work for him, and also for me,' Mr Abed Rabo said of Mr Abbas. 'We spent our lives building these institutions of the Palestinian people stone after stone. We lost so many friends, so many dear people, killed in the battles against Israeli occupation and in the battles against our Arab brothers who were trying to dominate us and decide the future of our people. We spent 40 years in order to defend a dream and we cannot sacrifice it.'

Mr Abbas, born in Safed in what is now Israel, accompanied Arafat into exile in Jordan, Lebanon and Tunis. He was appointed head of the PLO's department for national and international relations in 1980 and pioneered contacts with the Israeli left.

His most significant, if controversial achievement, was overseeing the secret negotiations with Israel that led to the Oslo accords. He envisions the self-rule institutions created by the accords as providing a nucleus for an independent state, but Hamas says Palestinians received nothing in exchange for recognising Israel and that Oslo merely allowed Israel to intensify its takeover of the West Bank through settlement building.

In recent years, Mr Abbas, known as Abu Mazen, criticised suicide bombings by Hamas and also Fatah and said the stress on armed attacks rather than popular protest harmed the Palestinian cause. His brief tenure as prime minister in 2003 was unsuccessful, with Arafat refusing to hand over key presidential powers including control of security forces. Since Hamas' election, however, Mr Abbas has himself refused to hand over powers demanded by the legislature and cabinet.

Mr Ramahi, the Hamas member of parliament, believes that Mr Abbas, encouraged by old guard advisers, may use his legal power to dissolve the government and declare a state of emergency. 'This is what we are afraid of, that he wants to cancel the results of the democratic election of January 25,' he said. 'There are people who found themselves out of power and they are now imposing a civil war to return to their posts.'

Analyst Hani Masri, who supports the call for the referendum, said the best alternative for Palestinians would be if it was endorsed. But, 'it's possible Hamas will thwart the referendum and this would mean civil war that could lead to the authority's collapse'.