By Nidal al-Mughrabi

GAZA, Oct 12 (Reuters) - Hamas leader Ismail Haniyeh on Thursday urged Palestinian President Mahmoud Abbas not to "fall into a trap" and make concessions to Israel at a planned peace conference which "would create grave risks for Palestinians".

The Islamist leader was speaking to some 10,000 worshippers near a mosque in the Gaza Strip before prayers to mark the Eid el-Fitr holiday after the fasting month of Ramadan.

Hamas, which seized control of Gaza in fighting with Abbas's Fatah forces in June, has repeatedly called on Palestinians not to participate in a peace conference slated to take place next month near Washington.

Abbas, who dismissed a Haniyeh-led government following the Gaza takeover, plans to attend the U.S.-sponsored conference on Palestinian statehood.

Abbas has ruled out talking to the Islamist group in a reconciliation effort until Hamas gives up its control of the Gaza Strip.

Israel has also said that reconciliation between the Palestinian parties could torpedo the conference and it is trying to bolster Abbas to sideline Hamas.

"We tell President Abu Mazen (Abbas) not to fall into traps and illusions. Do not make concessions over the fundamental issues of Jerusalem, refugees and the land," Haniyeh said in a speech.

Haniyeh said the conference "carries grave risks for the Palestinian cause and the entire region", adding that Israel and the United States would use it "as an occasion to provide new and more concessions".

Senior Abbas aide Saeb Erekat said in an Israeli television interview on Thursday that Abbas was determined to make the conference succeed and that he could resign if the talks failed. But he also said that success would end Hamas's reign in Gaza.

"When I say that Abu Mazen (Abbas) is not glued to his chair, I really mean it. It's not that he doesn't want to serve his people, but failure to produce an agreement will change the dynamics of thinking and thought within the Palestinian society," Erekat told Israel's Channel 10.

Erekat also acknowledged that Fatah is not strong enough to retake control of Gaza by force, but said "if an end game agreement is reached ... Hamas is over the same day in Gaza without a single shot".

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