Fatah and Hamas officials on Thursday welcomed a Yemeni initiative to form a new Palestinian unity government. However, PA Chairman Mahmoud Abbas rejected Yemeni President Ali Abdallah Saleh's proposal, senior Palestinian Authority officials here told The Jerusalem Post. The officials said Saleh phoned Abbas and informed him that Hamas had accepted the initiative and was willing to resume talks with Fatah to resolve the crisis in the PA. Saleh urged Abbas to accept the initiative and to resume talks with Hamas. Abbas is facing growing pressure from some Arab governments and Fatah leaders to patch up his differences with Hamas and to agree to the formation of a unity government. On Wednesday, Egyptian President Hosni Mubarak also urged Abbas to resume talks with Hamas. Yemen is one of several Arab countries that have been mediating between the parties in recent weeks. Fatah and Hamas officials revealed this week that the two movements were holding secret talks in a bid to end the dispute and form a national unity government. Damascus-based Hamas leader Khaled Mashaal visited Yemen earlier this week for talks with Saleh on ways of resolving the crisis. The Yemeni initiative calls for the resumption of Hamas-Fatah talks on the basis of the "national unity" agreement that was reached last February in Mecca, Saudi Arabia, and the Cairo accord that was signed in 2005 between all the Palestinian political factions, a top PA official said. The initiative also called for the "reconstruction" of all of the PA security forces so that members of Hamas and other Palestinian groups would be allowed to serve in them, he said. "President Saleh also proposed that an Arab committee be formed to supervise the implementation of the agreements that were reached in Cairo and Mecca," the official added. "But we have turned down the initiative because we insist that Hamas must first end its military coup in the Gaza Strip and apologize for its actions." Abbas said Thursday he did not rule out the possibility of talking to Hamas. But he reiterated his condition that Hamas first backtrack from its takeover of the Gaza Strip. "When Hamas reverses its actions in the Gaza Strip, we will consider our steps," Abbas told reporters in Amman after meeting with Jordanian Prime Minister Marouf al-Bakhit and Foreign Minister Abdul-Ilah al-Khatib. "We maintain our position that says if Hamas retracts from what it committed in Gaza, then we will see how we handle the situation," he said. Abbas also denied reports about secret talks between Fatah and Hamas. "There are no mediation efforts," he said. "There is also no dialogue and no one is authorized to conduct such a dialogue." Although Abbas reportedly turned down the latest initiative, one of his top aides, Ahmed Abdel Rahman, welcomed it, expressing hope that the mediation efforts would succeed. "We welcome all Arab, Palestinian and international efforts and initiatives aimed at ending the military coup in the Gaza Strip," he said. "What happened in the Gaza Strip serves only the interests of Israel and its expansionist schemes." Abbas met with Mubarak in Cairo on Wednesday, and appealed to him to authorize the construction of a moat that would prevent weapons being smuggled into the Gaza Strip from Egypt via the Philadelphi Corridor. Abbas proposed that the corridor - a land barrier under which terrorist groups dig tunnels to move weapons and ammunition - be turned into a trench and flooded with seawater, which would collapse any tunnels dug beneath it. The idea of a moat was originally floated during Abbas's meeting with Prime Minister Ehud Olmert in Sharm e-Sheikh. In another development, Nayef Hawatmeh, leader of the Democratic Front for the Liberation of Palestine and the man responsible for killing 22 children in a terrorist attack on Ma'alot in 1974, said he now wants to live in the Palestinian Authority, despite never having had a home there. In an interview with Channel 1 aired Thursday night, Hawatmeh said he was the first leader of a terrorist organization to propose making peace with Israel and to endorse a two-state solution. Hawatmeh said his presence in the PA would bolster Abbas, who, he said, needed the support of figures such as himself to advance his diplomatic plans. "Without us, who will you talk to?" he asked. Hawatmeh said Olmert should be "more generous" with Abbas - whom he described as a "true man of peace" - than he had been in the meeting held in Jericho on Monday. He said he had discussed the Jericho talks with Abbas. Hawatmeh took responsibility for the Ma'alot attack but did not express remorse. "Much blood has been spilled on both sides," he said, adding that history would judge both Israel and the Palestinians. On Wednesday, Hawatmeh met with Khatib in Amman on the situation in the Gaza Strip. "The situation in Gaza won't change unless Hamas itself decides to reverse it," he said. Hawatmeh said Hamas was not planning to impose Islamic rule on Gazans but would "focus its efforts on spreading Islamic culture and bolstering the traditional values of Palestinian society." Meanwhile, the Fatah-controlled government of PA Prime Minister Salaam Fayad opened an investigation into a "computer error" that resulted in the payment of salaries to 3,500 Hamas militiamen in the Gaza Strip on Tuesday. Although Fayad's aides said the salaries had been paid by mistake, sources here said a senior official in the PA Finance Ministry was being questioned about his role in the payments. A top PA official said there was good reason to believe that the money was transferred to Hamas deliberately and not as a result of a computer error. "What happened was very serious and embarrassing," he said. "We have launched a thorough investigation and those responsible will be punished." According to the official, as soon as the Fayad government learned about the transfer of the money to the Gaza Strip, it instructed the banks to return the payments. He said about 1,000 members of Hamas's paramilitary Executive Force managed to withdraw their salaries from the banks before the mistaken transfers were discovered. Also on Thursday, sources close to Fayad said his government had decided to purchase new cars for all the members of the Hamas-dominated Palestinian Legislative Council. Each car will cost about $70,000 and Hamas legislators will also receive them, the sources added. They also confirmed that the Fayad government had paid salaries to Hamas legislators in recent weeks, including to Hamas Prime Minister Ismail Haniyeh, who received $3,000. Haniyeh announced last week that he returned the money to Ramallah. AP contributed to this report.