Abbas kept his decision — elections at the earliest possible date — even from his closest aides. He had widely been expected to raise the possibility of an early vote, but be far less decisive.
CBS News correspondent Joie Chen reports that Abbas said to a cheering crowd, "Let us return to the people. Let them be the judge."
When he made the announcement, many in the auditorium at his headquarters leapt to their feet and clapped, relieved that months of indecision were finally over.
Pushing for elections is a gamble by Abbas that Palestinians will back him as he seeks to weaken the Islamic militants, avoid civil war and keep momentum for peace overtures with Israel.
Hamas accused Abbas of trying to topple its government, promised to block the elections and urged supporters to take to the streets. "This is a real coup," said Foreign Minister Mahmoud Zahar, a Hamas hard-liner.
Later Saturday, in Gaza, thousands of Hamas supporters marched in protest and 18 Palestinians were wounded in clashes between the two political camps.
Hamas' landslide election in January parliamentary elections split the Palestinian leadership into two camps. One, led by Abbas, seeks peace with Israel; the other, led by Islamic Hamas militants, is sworn to the Jewish state's destruction. The infighting has often degenerated into convulsions of violence, and this week, tensions reached their highest peak in years.
Abbas tried to end the power struggle by bringing Hamas into a more moderate coalition with his Fatah Party, but the Islamic group refused to pay the price he demanded — recognizing Israel and renouncing violence.
"We have a crisis. We have an authority with two heads. So what do we do? Bullets or ballots?" asked Saeb Erekat, an aide to Abbas. "Abu Mazen said ballots," he said, using Abbas' nickname.
Across the West Bank and Gaza, streets were largely deserted as everyone watched Abbas' 90-minute address, peppered with criticism of Hamas.
British Prime Minister Tony Blair urged the international community to support Abbas, while State Department spokesman Edgar Vasquez said it was "an issue for the Palestinian people to decide through a peaceful political process." Russia asked the Palestinians to try to maintain unity.
Abbas said a unity government was still the best option, but that he had despaired of persuading Hamas to enter into a coalition with Fatah. The Hamas government has drawn crushing international sanctions over its militantly anti-Israel stand, but has refused to recognize Israel, the West's condition for resuming aid.
"I ... decided to call for early presidential and parliament elections," Abbas said from his West Bank headquarters, after outlining months of failed coalition talks. "Let us return to the people, to hear their word, and let them be the judge."
His aides said they expected the vote to be held by the summer. In coming days, Abbas is to meet with the Central Election Commission to hear how much time it will need to prepare. Once he issues a formal decree calling for elections, the balloting must take place within three months.
In an immediate step toward parliamentary and presidential elections, Abbas announced he has appointed new Fatah leaders. Fatah officials said the party's younger leaders, who had long clamored for a role in decision-making, would now be given a chance. Fatah's old guard had refused to step aside, a key reason the movement remained in disarray after its election defeat.