Mahmoud Abbas - AP - 29112011
Mahmoud Abbas reviewing an honor guard at the Hofburg Palace in Vienna Monday. Photo by AP
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Palestinian President Mahmoud Abbas has set May 4 as the date for the general elections meant to end the four-and-a-half-year division between Hamas and Fatah.

Speaking after a meeting with Austrian President Heinz Fischer in Vienna on Monday, Abbas said a unity government of technocrats, chosen from both factions, will form to prepare for the vote.

Fischer announced that Austria was upgrading the status of the Palestinian representation in his country. Currently a PLO mission, it will now be a Palestinian Authority mission and be headed by an ambassador.

Abbas' announcement came as a surprise as no statement on the election date or unity government had been issued after he met with Hamas leader Khaled Meshal last week in Cairo.

Palestinian sources said Abbas and Meshal are close to agreeing that their differences over the unity government will not be an obstacle to the elections.

The Palestinians have been divided between two governments since Hamas overran the Gaza Strip in 2007. Hamas controls Gaza, while Abbas' PA governs in the West Bank.

If Hamas and Fatah don't agree on the head of the transitional government, Salam Fayyad will remain prime minister in the West Bank and Ismail Haniyeh will remain prime minister in Gaza, Palestinian sources said.

But the PA fears that if the transitional government is headed by anyone but Fayyad, Israel will use it as an excuse to withhold the PA's tax money, the sources said.

Palestinian politicians and commentators have warned in recent days that a further delay of several months in transferring the tax money would cause the PA's collapse.

Meanwhile, Hamas and Fatah have not released each other's prisoners, despite pledges by Abbas and Meshal. Nor have they made any other reconciliation gestures, sources said.

Also, Hamas recently prevented a group of Palestinian bankers - board members of the Bank of Palestine and Islamic Bank - from leaving Gaza.

About two weeks ago a Hamas court ruled that the two banks must pay the Hamas government hundreds of millions of shekels in tax money. When Hamas realized that the banks were not going to pay, it banned the banks' directors from leaving Gaza and confiscated their passports until the ruling is carried out.

The Palestinian Monetary Authority denounced Hamas' conduct and demanded that it stop, to prevent harm to Gaza's economy.