Hamas on Saturday rejected PLO demands that its government resign, deepening an internal Palestinian power struggle that has repeatedly erupted in bloodshed in recent months.
Hamas accused President Mahmoud Abbas' Fatah Party, which runs the PLO but lost January parliamentary elections, of trying to overthrow the elected government. A leading Fatah official called for fresh elections to resolve the standoff.
The latest row began after Abbas, who was elected separately last year, announced Thursday that talks for forming a unity government with the radical Islamic group had failed. The talks were aimed at ending a crippling foreign aid boycott against the Hamas-led government.
On Friday, the PLO's Executive Committee called on Prime Minister Ismail Haniyeh of Hamas to resign to make way for a new premier, who could then resume coalition talks with Abbas.
Hamas rejected that call. "This is a coup," Hamas spokesman Fawzi Barhoum said Saturday. "We cannot accept such a step, which is against Palestinian democracy and goes against the election results.
The PLO doesn't represent the Palestinian people."
On Saturday, Abbas met with top European diplomats in Gaza to brief them on the domestic disagreements and a truce with Israel in Gaza that took effect a week ago.
In his meeting with Abbas, German Foreign Minister Frank-Walter Steinmeier welcomed the cease-fire with Israel but characterized it as "thin and barely sustainable."
"I hope that wider scope will be found to bring about lasting stability in the region," Steinmeier told reporters after the meeting.
EU foreign policy chief Javier Solana said the collapse of unity government talks killed hopes of ending the international economic sanctions on the Palestinian government and said Hamas missed its opportunity.
"Very sadly, I have to say the chance has been lost," he told reporters after meeting with Abbas.
Abbas' choices for breaking the impasse with Hamas are limited. He has the authority to fire the government but a new Cabinet he appoints in its place would not win confirmation by the Hamas-dominated parliament.
Palestinian law does not allow the president to call early elections, but he could try to skirt that by calling a referendum on whether such elections should be held, Abbas aides said.
A member of the panel Abbas appointed to guide him in the impasse said the emerging consensus among its members was in favor of early elections, both for president and parliament.
"Let us go to our people, and tell them the truth, and let them decide what they want," said panel member Azzam al-Ahmed, leader of the Fatah bloc in parliament. "This choice, the early election, will be much better than the current situation, even if Fatah lost both the presidential and parliament elections."