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By Wafa Amr

RAMALLAH, West Bank, Dec 16 (Reuters) - President Mahmoud Abbas called on Saturday for Palestinian elections, throwing down the gauntlet to his Hamas rivals after days of factional violence that have sparked fears of civil war.

Abbas said parliamentary and presidential polls should be held at the earliest opportunity, but appeared to leave the door open to the ruling Hamas by saying renewed efforts should be made to form a government that could lift Western sanctions.

Gunmen from Hamas and Abbas's Fatah faction clashed hours later in Gaza and at least six people were wounded, witnesses said. They said the rivals exchanged fire with automatic weapons and rocket-propelled grenades.

Internal Palestinian tensions are at their highest in a decade after the collapse of months of talks between the Hamas Islamist movement and Fatah on forging a unity cabinet.

"I have decided to call for presidential and parliamentary elections ... The crisis is getting worse," Abbas said in a speech in the West Bank city of Ramallah.

Hamas, which trounced Fatah in parliamentary elections in January, accused Abbas of launching a coup and said the president had no authority to call early elections.

British Prime Minister Tony Blair urged foreign governments to support Abbas while the United States said it hoped elections would enable peace talks with Israel to resume. Israel did not comment on the election call but lauded Abbas as a moderate leader over Hamas, which seeks the Jewish state's destruction.

The Hamas movement's leaders said they would never allow early elections to be held but did not say how.

"His speech of defeat was a source of satire, laughter and disgust. He has taken out his sword against the Palestinian people," senior Hamas lawmaker Mushir al-Masri told thousands of Hamas supporters at a protest rally in Gaza.

"The government is staying. Whoever does not like that can leave." One Hamas official who declined to be named said the speech by the normally cautious Abbas had "shocked" the faction.

The Islamic Jihad group and other small militant groups also rejected Abbas's election call.

The Palestinian basic law, which acts as a constitution, has no provision for calling early elections.

Fatah officials say Abbas can do so by issuing a presidential decree. Hamas said it would be illegal.

A senior Abbas aide, Saeb Erekat, said elections could not be held before the middle of next year for legal and technical reasons. He said Abbas had to issue a presidential decree to provide a framework for the early polls. After that, voter rolls would need some 90 days to be updated.

BLAIR VISIT

Blair, on a peace drive in the Middle East, will meet Abbas in the coming days. "This is the moment for the international community to come behind him," Blair said in Cairo.

The United States said it hoped elections would help calm Palestinian violence.

At times combative, Abbas made clear he had the power to sack the 9-month-old Hamas government which has struggled to function under the weight of the U.S.-led embargo on its administration.

"I can do it whenever I want," Abbas said. Fatah activists in Gaza and the West Bank broke into celebrations when Abbas issued the election call, firing weapons into the air.

Hamas surprised Fatah by winning the parliamentary elections and sanctions were imposed after it took office in March because it refused to recognise Israel and renounce violence. Opinion polls do not indicate which faction would win new elections.

Abbas was elected separately in early 2005 in a presidential poll that Hamas did not contest. Palestinian political analyst Ali Jarbawi, who met Abbas on Friday, told Reuters the president told him he would not run.

Abbas wants a negotiated peace settlement with Israel. Hamas's stance toward the Jewish state has scuppered previous unity government talks. (Additional reporting by Nidal al-Mughrabi in Gaza, Mohammed Assadi in Ramallah, Ori Lewis and Corinne Heller in Jerusalem, Katherine Baldwin in Cairo and Caren Bohan in Washington)

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