Internal conflict is looming with disputes between Palestinian President Mahmoud Abbas and the Hamas-led cabinet escalating.

The new Palestinian government headed by Hamas has plunged into severe financial crisis and international isolation since it was sworn in on March 29 following Hamas' surprising victory in the Jan. 25 parliamentary elections.

Israel, considering Hamas a terrorist organization, stopped monthly transfer of some US$50 million in custom duties and tax payment collected on behalf of the Palestinian National Authority (PNA) unless Hamas gave up its commitment to the destruction of Israel.

The United States and the European Union piled additional pressure on Hamas by cutting off direct aid to the PNA after Hamas defied their demand to recognize Israel, renounce violence and accept signed agreements with Israel.

Some Palestinian observers said that the cash-strapped Hamas government began to blame Abbas and his former ruling Fatah movement for the current plight, when it was unable to pay wages of 150,000 government employees.

Hamas spokesman Sami Abu Zuhri accused on Saturday some internal elements of joining in "Israeli-American conspiracy" aimed at crippling the Hamas-led government.

"The economic siege imposed on the Palestinians will collapse," he said, adding the government "would be able to overcome the obstacles as the Palestinian people have the support of the Araband Islamic world."

He warned that some internal parties are trying to create further problems in the Palestinian territories, without naming the parties.

Abu Zuhri's remarks came one day after Hamas politburo chief Khaled Mashaal accused Abbas and his Fatah of corruption and plotting to topple Hamas-led cabinet.

Mashaal made the accusation at a gathering in the Syrian capital of Damascus to mark the second anniversary of the Israeli killing of Hamas spiritual leader Ahmed Yassin.

Mashaal waged the verbal attacks soon after he learnt Abbas annulled a decision by Hamas interior minister Said Siam to form a special police force to restore law and order in the chaos-striken Palestinian territories, which would recruit 4,000 militants from different armed factions.

The latest tension followed Hamas irritation over Abbas's decree sending his special security forces to take over control of Rafah crossing on the borders between Gaza and Egypt earlier this month.

Hassan Abu Shaweesh, a Palestinian political observer in Gaza, said he feared that the war of words between Hamas and Fatah could turn into physical.

"We strongly condemn Mashaal's offensive statement against Fatah which has headed the Palestinian struggle for decades," AbuThaer, the spokesman for al-Aqsa Martyrs Brigades, an armed wing of Fatah, told a news conference in Gaza.

"We call on the government and Prime Minister Ismail Haneya to clarify in public if these statement represents the government policy,"said Abu Thaer.

Meanwhile, Palestinian chief negotiator and senior Fatah official Saeb Erekat told radio Voice of Palestine that Mashaal's speech was "very dangerous", calling on Hamas to "retract it immediately and shoulder its duties."

"I'm forced to counter these dangerous remarks which push our people towards civil war," said Erekat.

Fatah supporters and militants took to the streets in the West Bank and the Gaza Strip to protest against Mashaal's speech.

Observers said that the growing tension between Hamas and Abbas would not ease as long as Hamas refused to abandon its hardline position and seek a negotiated end to the Israeli occupation as Abbas advocated.

(Xinhua News Agency April 24, 2006)