Western-backed Palestinian President Mahmoud Abbas says his people must not "mar their legitimate struggle with terror" and that while his government seeks peace with Israel, it reserves the right to resort to "resistance."

Abbas spoke Tuesday to about 2,200 Fatah delegates gathered in the West Bank. The meeting is the first first convention held by the movement in two decades.

Fatah's last conference was held in 1989 in Tunis under late Palestinian leader Yasser Arafat.

Abbas said Palestinians must persist with peace negotiations with Israel, "as long as there is a tiny bit of hope."

The meeting seeks to revitalize Fatah's flagging popularity and bolster Abbas' own standing as he faces a hawkish Israeli leadership and a bitter internal standoff with Islamic Hamas rivals.

Hamas prevented Fatah delegates from Gaza from leaving the strip to attend the convention.

Abbas told the conference on Tuesday that Palestinians sought peace with Israel but "resistance" remained an option.

"Although peace is our choice, we reserve the right to resistance, legitimate under international law," Abbas said in a policy speech, using a term that encompasses armed confrontation with Israel and non-violent protests.

Abbas' comment was echoed earlier Tuesday by Jibril Rajoub, a senior Fatah official who served as a key security advisor to Arafat.

Rajoub said on Tuesday that the movement has not relinquished the option of armed struggle against Israel.

After a journalist asked Rajoub about a large picture of a young boy armed with a rifle that was displayed at the conference, the former Arafat aide responded that Fatah has not abandoned nor will it abandon the possibility of resuming "armed struggle," which he says remains a tool at the Palestinians' disposal.

Despite Rajoub's statements, Fatah's proposed new platform marginalizes the once central theme of "armed struggle" against Israel, but demands a complete Israeli settlement freeze before talks for a final peace deal can take place.

The 41-page draft proposal, published on Monday, is to be presented for approval this week to Fatah's first convention in 20 years.

It's a thorough rewrite of the 1989 platform, reflecting the dramatic events in the Israeli-Palestinian conflict - the establishment of the Fatah-led Palestinian Authority in the West Bank and Gaza in 1994, two Palestinian uprisings against Israel, several rounds of peace talks, and the 2007 fall of Gaza to Fatah's rival, Hamas.

The international community and Israel will watch the three-day convention closely, particularly Fatah's continued commitment to negotiations. Israeli officials have declined to comment on the conference.

During the three-day convention more than 2000 Fatah delegates from all over the Middle East will update the movement's political platform and elect representatives for its leadership institutions.

Some 100 candidates are contending for the 21 seats in the central committee, including prominent Fatah leaders like Mahmoud Abbas, Marwan Barghouti, Mohammed Dahlan, Rajoub, Ahmed Qureia and many others.

Hundreds more are vying for one of the 120 seats of the revolutionary council, the second most important decision-making institution in the organization.

Fatah activists hope the convention, which will likely see most incumbent central committee members replaced, will clean up its corruption-tainted image and transform the organization into a vibrant alternative to the Islamic militants of Hamas.

Special generators were brought to Bethlehem's Terra Santa School, where the convention will be held, and ushers will be on hand to maintain order.

Palestinian Authority security forces have been deployed all over the city to prevent clashes and possible Hamas sabotage.

The pan-Arab newspaper Asharq al-Awsat reported on Tuesday that the Fatah-dominated Palestinian Authority decided to freeze cash transfers to the Hamas-ruled Gaza Strip.

The newspaper reported that the decision was made following an emergency meeting called by Palestinian President Mahmoud Abbas, yet the freeze was due to be announced following the conclusion of the Fatah conference.

Pictures of Yasser Arafat and posters of slogans such as "Resistance is a legitimate right against the occupation" have been hung up in Bethlehem's main streets.

Several hundred Fatah delegates from Gaza , whom Hamas has forbidden from leaving the strip, will not be attending the convention.

A shopkeeper near the convention site told Haaretz he thought Fatah leaders care only about themselves.

"We haven't seen any real change in the economic situation. True, Hamas is no better, but we see no improvement, either with Fatah or Hamas," he said.