RIYADH, June 27 (Reuters) - Saudi Arabia's King Abdullah called on Palestinians to resolve their disputes in an interview published on Wednesday and urged international backing for an Arab peace proposal with Israel.

"I call on the brothers in Palestine ... to let sense and wisdom win out and ... sort out their dispute to avoid unfortunate consequences," the king said in comments published on the official SPA news agency.

Palestinian rival factions Fatah and Hamas, who accepted a Saudi-brokered peace deal in Mecca, home to Islam's holiest shrine, earlier this year fell into renewed fighting this month.

The violence left Islamist group Hamas in control in the Gaza Strip and Palestinian President Mahmoud Abbas' Fatah group in control in the West Bank.

"Things can't go on as they are now because that only does a service to those who are stealing Palestinian land and harms the just Palestinian cause," the king said in the comments also made to Jordan's al-Ra'i newspaper.

The ruler of the world's biggest oil exporter said some countries' unwillingness to back the Palestinian unity government had helped caused the breakdown. He did not name any countries apart from "obstinate" Israel.

The United States and other countries withheld financial aid to the Palestinian Authority after Hamas, which refuses to recognise Israel and renounce armed struggle, won parliamentary elections in January 2006.

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