Mahmoud Abbas, the Palestinian president, will dismiss the Hamas-led government and call early elections if he fails to form a new unity government, officials have said.
But Hamas officials have immediately condemned the move and claimed Abbas had no authority to call new elections. It called the decision "a clear coup against democracy".
PLO officials said Abbas announced his decision at a meeting of the group's powerful executive committee and plans to deliver a formal nationwide speech next week.
The formation of the Hamas-led government brought economic sanctions by
Abbas urged Hamas to join Fatah in a unity coalition in order to get the sanctions lifted. But the talks ended in deadlock over the division of cabinet portfolios and the issue of recognising
Talks on forming a unity government broke down last month.
Ismail Haniya, the Palestinian prime minister, rejected Abbas's plan to hold early elections, saying it would accentuate "crisis and tensions".
"I think that the invitation to carry out the elections in this way is disrespectful to the Palestinian people," Haniya said in an interview with Iranian television on Saturday.
"I believe that this will increase the crisis and the tensions and will have a negative impact," said the head of the Hamas-led government, who is visiting
Khalil al-Hiyya, the chief of the Hamas bloc of lawmakers, told AFP in
"This decision is not in the national interest and will only make the situation more tense."
"We had an intense discussion on various options, and from what we heard, he is leaning toward going back to the people with a call for early presidential and legislative elections," Saeb Erekat, a senior Palestinian aide, said.
Participants in Saturday's meeting said Abbas has not set a deadline for holding the new election.
But an official close to Abbas said the election would probably be held in four or five months. The official spoke to the Associated Press on condition of anonymity.
Calling a new election would be risky for Abbas as he would be putting his own job on the line and there are no guarantees that Fatah would improve its standing in a new vote.
The movement, which dominated Palestinian politics for four decades, remains divided and tarnished by corruption.