RAMALLAH – Palestinian Authority President Mahmoud Abbas on Thursday said negotiations with Israel will remain possible, despite the announcement Wednesday that Fatah and Hamas agreed to form an interim government following a meeting held in Cairo.

Abbas said that the PLO would still be in charge of handling politics and negotiations with Israel, and “will continue our policy of one authority, one gun and the rule of law as long as I am president.”

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Abbas wouldn’t say whether or not Fatah or Hamas would rule the West Bank, but stressed that the main priorities for now are rebuilding the Gaza Strip and planning the upcoming elections.

Speaking to reporters at the Mukata presidential complex in Ramallah on Thursday, Abbas reiterated his statement that Israel must choose between peace with the Palestinians and continued settlement construction.

“I heard that Netanyahu said that Abu Mazen [Abbas] should choose between Israel and Hamas. I heard this for a few months and I made the answer that Hamas is part of the Palestinian people. I can’t exclude them. Like or dislike, agree or disagree, they are part of our people. You, Mr. Netanyahu, are our partner. We can’t exclude you, so we have to take both sides – not to choose between this and that. But please, Mr. Netanyahu, you have to choose between settlement activities and peace.”

When asked if the current unity government may bring about a deal for the release of captured IDF soldier Gilad Schalit, Mazen said, “We have always shown our sympathy for the situation of Gilad Shalit. We want him to return to his family, and we know how much his family is suffering. But please put in mind that we have 8,000 prisoners [in Israeli jails] whose families are suffering.”

On the issue of prisoners, Abbas did not say whether the PA would release Hamas prisoners in its jails – though he did clarify that the PA “has no political prisoners“ in its jails.

Abbas’s statements came during a meeting with representatives of a private Israeli peace initiative called “The Israeli Initiative,” launched this month at a press conference in Tel Aviv. The initiative counts among its members Israeli security services luminaries like former Shin Bet (Israel Security Agency) chief Yaakov Perry, and one-time Mossad chief Danny Yatom.

The initiative seeks a two-state solution based on the Saudi Peace Initiative, which calls for an end to the conflict in exchange for recognition of Israel’s right to exist, a withdrawal to the 1967 lines and a compromise on the Palestinian refugee issue.

Perry was the main speaker at the group’s debut press conference in Tel Aviv, but was abroad on Thursday and could not make the meeting in Ramallah, organizers said.

Other backers of the initiative, including former Military Intelligence chief Amnon Lipkin- Shahak and Yuval Rabin, were also absent.

The meeting was given an unexpected boost by Wednesday’s announcement of the Fatah-Hamas deal. Indeed, by Thursday afternoon, the Mukata was jammed with Israeli and foreign press questioning Abbas about the specifics of the unity agreement – and its ramifications for Israel and the wider Middle East.

Yatom took the opportunity to speak at the Mukata on Thursday to say that he believes the Hamas-Fatah unity deal “will promote the negotiation, and the process, in order to achieve peace.” He added that “we [Israel and the Palestinians] have a mutual war, and this is to fight against terrorists and those who try to harm any relations with the Palestinians and the Israelis.”

Yatom said that the recent turmoil in the Middle East should serve as “a catalyst to all of us to try to resume immediate talks between Israel and the Palestinians. I don’t think we have the luxury to waste even one month – much less six months, or a year,” he added.

Following the meeting, Fatah Central Committee member Jibril Rajoub dodged questions about whether an interim government that includes Hamas would recognize the state of Israel.

“It’s not the government’s job to recognize the State of Israel,” Rajoub said. “The PLO recognizes the rights of the State of Israel. You have a real, trustworthy partner.”

He added that “recognition of the State of Israel will only come by way of a peace agreement.”

The Hamas charter calls for the destruction of the State of Israel and its replacement by an Islamic state.

When asked about Netanyahu’s statement that Abu Mazen must choose between peace with Israel and unity with Hamas, Rajoub replied: “Netanyahu must also choose between Abu Mazen and [far-fight activist] Baruch Marzel.”

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