The standoff set the stage for Abbas to announce a referendum on the issue — a move that is sure to enrage the Hamas-led government in the short term but could offer it a way out of its world isolation. For now, the militants show no interest in grabbing the potential lifeline.
Also Monday, Israeli aircraft fired missiles at a car in the Jebaliya refugee camp next to Gaza City, the military said, killing two militants and wounding two bystanders, according to Palestinian hospital officials.
Israel said the main target, a militant from the renegade Popular Resistance committees, was involved in firing rockets at Israel. He died of his wounds.
Abbas has given Hamas until Tuesday to accept the proposal, which calls for a Palestinian state alongside Israel. Accepting the proposal would require Hamas, which is sworn to Israel's destruction, to implicitly recognize the existence of the Jewish state.
A last-ditch negotiating session Monday night was called off, and participants acknowledged there was little chance of reaching a deal before a midnight deadline.
Hamas has been calling for more time to discuss the proposal and suggested changes in the language. But Abbas, who has avoided confrontation since taking office early last year, rejected Hamas' demands Monday.
"If anyone wants to amend this document, then we will not reach any results," Abbas told reporters after meeting with European Union foreign policy chief Javier Solana.
Officials close to Abbas said he was consulting with legal experts to prepare for the referendum. He planned to meet Tuesday with senior PLO officials before issuing a presidential decree. The vote is expected roughly one month later.
Abbas has endorsed the plan as a way to end crushing sanctions against the Palestinians and allow him to resume peace talks with Israel.
The United States, European Union and Israel have cut off cash transfers to the Palestinian government since Hamas won legislative elections earlier this year. The Western countries want Hamas to renounce violence and recognize Israel.
The plan was formulated by politically powerful Hamas and Fatah prisoners held in Israeli jails. But the group's exiled leaders, who make final decisions on policy, have refused to accept the proposal.
In the Gaza Strip, Hamas officials reacted angrily to Abbas' threats Monday.
Palestinian Prime Minister Ismail Haniyeh, in a brief interview with Israel's Channel 10 TV, favored "a continuation of the dialogue," and opposed the deadline, which he called "a sword at our necks."