CAIRO (Reuters) -- Palestinian President Mahmoud Abbas said in remarks published on Thursday that Arab states were preparing ""binding"" proposals for a settlement between the Islamist movement Hamas and his own Fatah group.

Abbas also told the London-based al-Hayat newspaper in an interview that a deal could avert a constitutional crisis when his term ends next January and allow for general elections in the first half of 2009.
""There's a trend at the Arab League to present a draft proposal of a binding nature on Palestinian reconciliation, in the sense that this draft would be presented to the factions,"" Abbas said.
He said the proposals are based on an earlier Arab initiative calling for setting up a government of technocrats, new Palestinian elections and the rebuilding of Palestinian security forces under Arab supervision.
Arab League Secretary-General Amr Moussa said earlier this month he was angry with fractious Palestinian political groups and warned that Arab governments were discussing sanction against any group obstructing reconciliation.
Hamas routed Abbas's forces in Gaza in June 2007. In response, Abbas dismissed the Hamas-led government and appointed a new administration in the occupied West Bank where his Fatah group holds sway.
Abbas said rival Palestinian group Hamas might try to retain control of the Gaza Strip, rejecting compromise proposals that emerge through the Egyptian mediation.
The Arab League is dominated by Arab conservatives, which back Abbas's Palestinian Authority.
Egyptian intelligence chief Omar Suleiman has been holding separate talks with Palestinian factions throughout September, including a delegation from Abbas's Fatah group this week. Suleiman will meet Hamas representatives next month.
The head of the Fatah negotiating team, Nabil Shaath, told Reuters, Fatah was no longer demanding a return to the status quo in Gaza before Hamas took control in July 2007.
In the interview with al-Hayat, Abbas repeated the Fatah line of the past year. ""If the matter were left to the people of Gaza, you would find that 90 percent of them, and I am not exaggerating, want an end to the ordeal in which Hamas put them by its coup against the (Palestinian) Authority,"" he said.
Abbas, whose term ends on Jan. 19, 2009, said he was ready to call new presidential and legislative elections early next year if a reconciliation deal was reached soon.