Stephen Farrell, Middle East Correspondent of The Times, says that President Mahmoud Abbas has taken a huge gamble to threaten Hamas with a referendum, and much depends on which way the Islamist group decides to jump.

"It was a big surprise. At the end of a lengthy and somewhat unfocused speech to the Palestinian national convention, Mahmoud Abbas made his announcement out of the blue. Everyone had lost interest and suddenly sat up straight. Having dropped his bombshell, the Palestinian President got up and walked out.

"Mr Abbas has threatened to hold a referendum on a document drawn up by leading Palestinian militants. The document explicitly calls for a two-state solution, with a Palestinian state in the West Bank, Gaza and Jerusalem. It authorises the Palestinian Liberation Organisation (PLO) to carry out the negotiations.

"Ismail Haniya, the Prime Minister of the Palestinian Authority, refused to take questions, so we don't know if he was consulted in advance. As a result, everyone is now scrambling to understand exactly what it means.

"Mr Abbas's move appears to have wrong-footed Hamas in bypassing the government and going straight to the Palestinian people to take a decision on whether to recognise Israel.

"The initial Hamas reaction appears contradictory. Ghazi Hamad, the spokesman for the Hamas-led government, has said: 'We will accept the will of the people.'

"Once Hamas's response crystallises, it will become clearer whether they are angered at Mr Abbas having put conditions on dialogue, and intend to oppose it; or whether it is in fact a convenient way for Hamas - which remains in principle opposed to the existence of Israel - to sidestep the issue, leaving the decision in the hands of the Palestinian people.

"I think Mr Abbas has concluded that he has been strengthened by the recent remarks of President Bush, urging Israel's Prime Minister, Ehud Olmert, to talk to him.

"There do remain many obstacles, however, and Mr Abbas may just be using the referendum as an ultimatum to focus Hamas's minds on stopping the violence and restoring stability to the streets.

"The talks that are going on at the Palestinian national convention have a wide agenda, but the priority is to stop a slide into civil war, and after that to bring about reform of the security services. Ultimately the convention aims to smooth the way for Hamas's entry into the PLO.

"Entering the PLO - whose charter recognises the state of Israel - would be another way for Hamas de facto to recognise Israel without alienating their own hard core supporters.

"It is a very delicate and finely balanced situation. Ultimately Hamas is either going to become annoyed, or to see this as a way round their problems."

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