(Adds government on "armed struggle")

By Mohammed Assadi

RAMALLAH, West Bank, July 27 (Reuters) - Palestinian President Mahmoud Abbas vowed on Friday to reform his Fatah movement after an internal inquiry savaged the conduct of those leaders who lost the Gaza Strip to Hamas Islamists last month.

Receiving a 200-page report by senior party officials and security chiefs, Abbas said: "Rest assured that we will take this report as it is ... and implement it in its entirety."

Presidential aide Nabil Amr said the report found the Fatah security forces in Gaza were hobbled by nepotism, infiltrated by hostile elements and weakened by taking recruits motivated simply by making a living rather than deep conviction.

Amr, who was on the 9-member panel that conducted hundreds of hours of interrogations of Fatah commanders, told a news conference: "We insist on drawing lessons from this experience and making it a true first step toward real reform."

On Thursday, Abbas accepted the resignation of his national security adviser Mohammad Dahlan. Absent for medical treatment while Hamas swept his secular, Fatah-run forces from their bases in his native Gaza, Dahlan disappointed U.S. sponsors who aided his forces and saw him as a tough bulwark against the Islamists.

It is not clear whether Dahlan may himself face disciplinary action. But a senior member of the inquiry panel said some 60 Fatah security officers, up to the rank of brigadier, would face courts martial. Others have already been demoted, Amr said.

He added: "Some Palestinian security officials gave misleading information to the leadership."

The report itself was not made public but Amr said it criticised a lack of coordination among security forces during the fighting in June that left more than 100 dead and saw Fatah men abandoning key posts, including Abbas's own Gaza compound.

"There was no field command. That was terrible," Amr said.

Though he did not spell out that it was Hamas which was believed to have placed agents in the security forces, Amr said a "state of infiltration" of those forces had come about because of "random recruitment", among other problems.

ORDERS DISOBEYED

He also said the report found that security officials failed to obey instructions from Abbas that they take measures to forestall a possible "coup" by Hamas before fighting broke out.

Senior Fatah officials have appeared anxious to shield Abbas himself for any blame for the debacle in Gaza.

But senior Hamas official Sami Abu Zuhri said the report showed precisely that: "President Abbas should admit his responsibility before the Palestinian people because he is the commander-in-chief of the security services, which the report shows were responsible for the attack on Hamas and the people."

He said the report also bore out Hamas's accusations that the Fatah-run security forces have been riddled with corruption.

A week of bloodshed saw Hamas take charge of all of Gaza and the coastal enclave's 1.5 million people. Fatah still controls the West Bank, which is home to 2.5 million Palestinians.

Abbas dismissed an elected, Hamas-led government and appointed a new cabinet led by Prime Minister Salam Fayyad, which has secured an end to international sanctions imposed on its Hamas predecessors and is working with the Israeli government to secure concessions in the occupied West Bank.

The United States hopes warming relations could help restart peace negotiations. Secretary of State Condoleezza Rice visits Jerusalem and Ramallah next week.

Israel welcomed on Friday remarks by ministers that Fayyad's government programme, yet to be presented to parliament, does not feature a commitment to "armed resistance" -- unlike those of its Hamas-led predecessors. And officials on both sides said cooperation on security issues was making daily progress.

The Gaza Strip, in contrast, remains all but cut off from the rest of the world, shunned by Israel, the West and Abbas.

In an interview with Reuters on Thursday, Abbas again said he would not talk to Hamas until they gave up control of Gaza and said he planned to decree a change in electoral rules that, in any future ballot, might hamper the Islamists' chances of repeating their parliamentary election victory of last year. (Additional reporting by Nidal al-Mughrabi in Gaza and Avida Landau and Alastair Macdonald in Jerusalem)

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