Palestinian leaders hold meeting

In previous talks, Mr Abbas (r) has said Hamas must change its policy

Palestinian President Mahmoud Abbas is holding talks in Gaza with Ismail Haniya, the prime minister of the Hamas-led government.

The talks are taking place amid reports that Hamas and Mr Abbas' Fatah Party are inching towards an important deal.

The two sides are attempting to resolve differences and formulate a joint strategy on how to approach Israel.

Hamas' refusal to recognise Israel or denounce violence has led to a power struggle between the two factions.

Officials from Hamas and Fatah have been negotiating for several days and have expressed optimism that differences can be resolved.

It is hoped the meeting between the two leaders will help to push the process forward.

Referendum plans

In-fighting is threatening to destabilise the Palestinian Authority. Hamas, which holds power in the government, refuses to recognise Israel or renounce violence.

The power struggle has led to violence in the streets between armed Hamas and Fatah loyalists in recent weeks.

But Mr Abbas has put forward a referendum on a statehood plan which implicitly recognises Israel, whose right to exist Hamas rejects.

Mr Abbas has given Hamas an ultimatum - accept the statehood plan, or the Palestinian people will be asked to approve it directly in the referendum scheduled for 26 July.

He says the plan is needed because Palestinian political parties have reached a deadlock over how to approach Israel.