A vote on Palestinian borders will be called if rival factions cannot agree a political programme, Palestinian Authority President Mahmoud Abbas says.
He was speaking at a conference aimed at ending violence and divisions between the main factions - his own Fatah party and militant group Hamas.
Hamas and Fatah now had 10 days to agree a deal, Mr Abbas said.
Fatah recognises Israel, but Hamas officially wants an Islamic state in Israel, the West Bank and Gaza.
However, Hamas' Ismail Haniya, the Palestinian prime minister, has said recently that Hamas would observe a long-term ceasefire if Israel withdrew to its pre-1967 borders.
Israel on Thursday responded to the factional divisions by authorising the delivery of light weapons and ammunition to Fatah's security forces.
Supporters of Hamas and Fatah clashed again on the streets of Gaza shortly after their leaders addressed the conference, reports said.
Prisoners' plan
Mr Abbas was quick to play down suggestions his move was meant as an challenge to Hamas.
If no political agreement was reached, he said, a document drawn up by senior Palestinian leaders currently in Israeli jails would be put to a public vote within 40 days.
Rivals: Fatah and Hamas
Jailed leaders from across the Palestinian political spectrum have backed the 18-point plan but it has not received official approval.
"The situation is getting more dangerous. The whole nation is in danger. We can't wait for the rest of our lives," Mr Abbas said.
Hamas' Abdel Aziz Dweik, speaker of the Palestinian Legislative Council, appeared in principle to back Mr Abbas' plan.
"Returning to the people is one of the most important principles in democracy," he said, describing the proposal as a good basis for dialogue.
The 18-point document was agreed by senior figures from Hamas, Fatah, the Popular Front for the Liberation of Palestine (PFLP) and Islamic Jihad.
It sets out formal Palestinian claims to an independent state on land occupied by Israel in 1967, as well as the right of all Palestinian refugees to return to former homes inside Israel.
Thousands of Palestinians left their homes following the establishment of Israel in 1948.
The document calls for continued resistance within lands occupied by Israel in 1967, suggesting that attacks inside internationally-recognised Israel would end.
Jeopardy
Earlier, both Mr Abbas and Mr Haniya stressed the need for their factions to come to an agreement over governance of the Palestinian Authority.
"This crisis, everyone is feeling the danger. Our national plan is in jeopardy"
The PA has faced a financial crisis since Hamas won elections in January, with key international donors withdrawing aid payments.
On the streets tensions between supporters of both groups have risen in recent weeks, with at least nine people killed in clashes this month.
Hamas has also deployed a new, independent security force in Gaza.
Addressing delegates to the conference before Mr Abbas spoke, Mr Haniya said Hamas would not countenance a descent into civil war.
"Civil war is not in our vocabulary," he said, calling on Hamas supporters to "abandon the language of violence".
The Israeli defence ministry on Thursday responded to the factional clashes by agreeing to send to Fatah forces "several hundred weapons imported from foreign countries which will be transferred under tight control".
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