Palestinian President Mahmoud Abbas said on Saturday (November 11) that he expected to form a unity government with the rival Hamas faction by month's end in hope of lifting a Western aid embargo on his people. Addressing tens of thousands of Palestinians after a week in which rancour soared over bloody Israeli military actions in the Gaza Strip, Abbas called on the Jewish state to talk peace. "I announce to our people that we have achieved great progress on the path of establishing a national unity government that can end the siege and open the way towards a political settlement that would end occupation forever. And I expect God willing that this government would see light before the end of this month," Abbas said in a speech marking the second anniversary of the death of his predecessor, Yasser Arafat. The United States and Europe imposed crippling sanctions on the Palestinian Authority when Hamas Islamists ousted Abbas's more moderate Fatah faction in a January election. Israel also withheld tax and customs receipts owed to the Palestinians. Hamas, which advocates Israel's destruction and helped spearhead a Palestinian revolt that erupted in 2000, has refused to soften its stand, prompting Abbas to seek to bring Fatah into the government in a bid to bridge differences. Palestinian officials have also said Prime Minister Ismail Haniyeh of Hamas would not be part of a unity cabinet. Israel has cautiously welcomed Abbas's efforts, though it insists that any new Palestinian government must recognise its right to exist and renounce violence -- preconditions set by Western power-brokers -- before peace negotiations can begin. But Abbas said Israel must also take the lead. "However, the Israeli government is wasting the opportunities and escapes and refuses to sit down at the negotiating table. In fact, it deepens its occupation and settlements and siege and raids on our land . And what happened in Beit Hanoun, is a live example of the Israeli policy and stance towards our people and towards the security and peace in the Middle East. And What happened in Beit Hanoun is happening on daily basis in all the Palestinian Areas from Jenin to Rafah," he said. Palestinians seek statehood in the West Bank and Gaza, which Israel captured in the 1967 Middle East war. Though Israel quit the latter territory last year, it has said it will keep Jewish settlement blocs in the West Bank under any future peace deal. The diplomatic deadlock since Hamas's election victory has seen spiralling violence between Israeli forces and Palestinian gunmen, as well as fighting between Hamas and Fatah loyalists. Israel has mounted military sweeps of Gaza to try to counter cross-border rocket salvoes and retrieve a captive soldier. The most recent mission culminated with the death of 19 civilians in an Israeli artillery barrage on the Gazan town of Beit Hanoun. Abbas condemned the killings -- which Israel said resulted from a gunnery error -- as a "barbaric massacre". But he said that Hamas's hard line against peace talks, rather than the previous Fatah-led government's pursuit of a coexistence with Israel, would only spell more bloodshed. In Gaza City, Palestinian Prime Minister Isamil Haniyeh reaffirmed his commitment to the Palestinian people's interest. "If they made me to chose between whether to lift the siege or stay in prime minister post I will chose lifting the siege. If they made me to chose whether to remain committed to the rights or to stay in office I will chose to stay committed to the rights," he said, commenting on the possibility that he might be forced to give away his post in order to lift the international sanctions. Earlier in Gaza, several dozens gathered at a monument for the decent leader Arafat and laid wreaths on his statue. Arafat died at the military hospital Percy in France on 2004 after suffering a brain haemorrhage. He was flown from the Ramallah with an illness whose details have not been disclosed. The leader of the Palestinian Liberation Organisation (PLO) died with his 40-year quest for a state unachieved. On 1993 he was elected President of the Palestinian National Authority and won a Nobel peace prize on 1994, together with late Israeli Prime Minister Yitzhak Rabin and Israeli leader Shimon Peres, for negotiations of the 1993 Oslo accords.