Abbas condemned Hamas' violent takeover of the Gaza Strip and demanded the Islamic militant group "retract its black coup" before there can be any dialogue between rival Palestinian factions.
"There are those who stabbed our democracy and preferred the military coup to the path of national dialogue," Abbas said. Hamas "cannot erase Arafat's achievements," he added.
Abbas spoke at a rally commemorating the third anniversary of Arafat's death, addressing thousands of supporters of Fatah, the group Arafat founded in the 1960s and headed until he died in 2004.
Fatah and Hamas have become bitter rivals in the Palestinian territories, and the hatred between the two groups has grown much worse since Fatah's forces were defeated by Hamas in June, losing Gaza to the Islamic group in five days of fighting.
'You are the greatest among people'
Though he saved his most strongly worded criticism for his Palestinian rivals, Abbas also criticized Israel, calling its West Bank separation barrier the "ugly separation apartheid wall" and saying Palestinians remained committed to removing all Israeli settlements and checkpoints in the West Bank.
But Abbas pledged to move ahead with peace talks with Israel, a policy strenuously condemned by Hamas, which remains openly committed to Israel's destruction.
"Peace and security cannot be achieved by aggressive actions and our strategic choice is peace, based on our full adherence to our national rights," Abbas said.
Abbas has been meeting regularly with Israeli Prime Minister Ehud Olmert ahead of a US-sponsored peace conference in Annapolis, Maryland later this month. The two leaders have been trying to draft an outline for an Israeli-Palestinian peace accord.
During the ceremony, Arab Knesset Member Ahmad Tibi spoke on behalf of the Palestinians living in Israel. Addressing Arafat, Tibi said, "You are the greatest among people... for those who agree or disagree with you, you are the greatest among people."
Tibi bitterly attacked "all who want to replace Arab communities like Umm el-Fahem and other communities in Wadi Ara in exchange for leaving the settlers under Israeli sovereignty – you'll leave and we'll stay," he said.
Ali Waked contributed to this report