He said that the Palestinians could not hope to secure a military victory over the Israelis and that the use of weapons would only be counter-productive to the national cause.

“I believe that it is clear that a military solution is impossible,” the Palestine Liberation Organisation (PLO) chairman told a gathering of business leaders in the West Bank town of Ramallah.

“The only way is the choice of peace. It is impossible to liberate Palestine with the use of weapons because the balance of power is not with us.”

Mr Abbas, who is running for the dominant Fatah faction, is the overwhelming favourite to succeed the late Palestinian Authority president Yasser Arafat in an election on January 9.

Mr Abbas has been a consistent critic of the militarisation of the Palestinian uprising but it was the first time that he had called for an end to the use of weapons since the start of campaign to become head of the Palestinian Authority.

The speech came as Israel approved arrangements to ensure the smooth running of the upcoming Palestinian presidential election.

Prime Minister Ariel Sharon’s cabinet rubber-stamped a deal reached between senior officials from both sides that will see the January 9 election held under the same framework as the presidential ballot in 1996, including voting rights for residents of east Jerusalem.

“It is important that it should be clear to the entire world that Israel has made possible free, fair and effective elections,” Mr Sharon said at the start of the cabinet meeting.

“The PA (Palestinian Authority) elections are very important in creating a leadership with which we hope it will be possible to make progress in the roadmap process,” he added, referring to an internationally drafted Middle East peace plan.

Mr Sharon said around 500 foreign observers would oversee the running of the election, led by former US president Jimmy Carter and ex-French prime minister Michel Rocard.

Under the agreement, Israeli troops will steer clear of Palestinian population centres over a 72-hour period before, during and after the election.

Israel will also ensure that all seven candidates can move freely around the West Bank, Gaza Strip and east Jerusalem during the course of the campaign.