Palestinian Prime Minister Salam Fayyad urged his counterpart in Gaza not to attend the summit, but Haniyeh's spokesman Taher Al-Nunu said Saturday afternoon that the terror group's leader had accepted the invitation.
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"This is a serious escalation by Iran against Palestinian unity and against the Palestinian Authority’s role as the guardian of the Palestinian people both in the Gaza Strip and in the West Bank including Jerusalem," Fayyad said in a statement.
"Unfortunately, this hostile Iranian position benefited from some recently-emerging trends dealing with Hamas as the representative of the Palestinian people of the Gaza Strip. Followers of this trend claim they do not want to take sides when it comes to Palestinian parties, as if the PA was one of numerous sides rather than being an umbrella for all the Palestinian people and factions both in the West Bank and in the Gaza Strip," he added.
Fayyad called for Haniyeh to "give priority to his loyalty to Palestine and his patriotism over any other considerations."
President Mahmoud Abbas, who was also invited to the meeting, was under the impression that he would be representing the Palestinian people and announced that he would head the delegation.
The Palestinian foreign minister said Abbas will not participate at the summit of non-aligned nations in Iran at the end of the month if Hamas also attends.
Riad Malki said Saturday the Palestinian Authority is seeking clarifications from Iran after Hamas announced it had been invited to the August summit and that Hamas’ prime minister Ismail Haniyeh would attend.
The PLO Executive Committee also issued a statement on Saturday, saying that Haniyeh's invitation shows "Iran has joined the goals of the Israeli band."
Iran hopes to earn diplomatic kudos by hosting a summit of the Non-Aligned Movement from Aug. 29-31 at a time when the West is seeking to cripple its economy and isolate it diplomatically over its disputed nuclear program.
UN Secretary-General Ban Ki-moon has already said he will attend, defying calls from the United States and Israel to boycott the event.
The invitation to Haniyeh highlights the rift in the Palestinian territories and will complicate matters for Abbas, whose Western-backed government sees itself as the sole representative of the Palestinian people.
Abbas' forces lost control of Gaza in a brief 2007 war with Hamas and he has since governed only in the occupied West Bank.
Iran has had strained relations with Abbas's Palestinian Authority, in part due to the PA's peace talks with Israel.
The PA has even accused Iran of plotting against it and of intervening in its internal affairs by inciting factions like Hamas to carry out military attacks on Israel in an attempt to sabotage the peace process.
Hamas, in contrast, is sworn to Israel's destruction, a position which is more aligned with the view of Iranian President Mahmoud Ahmadinejad, who as recently as last week said there is no place for Israel in the Middle East.
AP, Reuters contributed to the report
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