Palestinians will not accept Israel's construction of settlements on occupied Palestinian land, President Mahmoud Abbas told a crowd attending a memorial for late Palestinian leader Yasser Arafat on Thursday in Ramallah.

"We don't want settlements on our land for they are illegitimate from the beginning. We all are sure that Jerusalem is the Palestinians' capital and the refugees will return," he said to the tens of thousands gathered at the site dedicated to the construction of the Arafat Museum.

He added that there will be no final peace deal until all Palestinians imprisoned by Israel are released.

In a PA Cabinet meeting the day before, officials agreed to provide free public transportation for individuals across the West Bank who wished to attend the events, and also granted $1.5 million for the completion of the Arafat Museum.

Large crowds attended the annual memorial service for Yasser Arafat, the longtime Palestinian leader who died in 2004. Arafat, the founder of the Fatah movement, for decades lead the Palestine Liberation Organization, beginning negotiations with Israel in 1991 until the talks collapsed in 2000.

The primary theme of Thursday's memorial was a continuation of Fatah's traditional rhetoric: a refusal of negotiations while Israel expands West Bank settlements; an affirmation of Jerusalem as the Palestinian capital and a demand for Palestinian refugees to return to their homeland.

During his speech, Abbas also condemned the Israeli army's daily incursions in Palestinian towns, along with the uprooting of trees, confiscation of land and other "illegal actions."

Abbas criticized Hamas for what he called a "coup" against pro-Fatah forces in Gaza. But, he said, Fatah wants dialogue with Hamas. He noted that Fatah had signed an Egyptian proposal for reconciliation between the two groups which Hamas did not. Responding to Hamas' argument that a "US veto" is preventing Fatah from finalizing a unity deal, he said Fatah had defied US wishes in the past.

In Gaza, Fatah officials said Hamas police quashed two events marking the day, one in Gaza City which never got off the ground - police said permits were denied for security reasons - and another in the southern city of Rafah, where PLC member for Fatah Ashraf Juma told Ma'an that police shut down his event.

He said he had announced a small commemoration marking the sixth anniversary of the death of Arafat, which was set to include a film screening featuring Khalil Ibrahim Al-Wazir (Abu Jihad), a slain leader affiliated with Fatah.

"The police cut the electricity and tried to confiscate the equipment, but we were able to stop them," Jom'a said, adding that in the process, 30 of those attending the event were detained, then released after two hours.

"This act does not come from people who want reconciliation," he accused.

According to Israel's Foreign Press Association, police also detained journalists at the Rafah event, ordering them to hand over all footage and still photos of the event.

The event closure followed reports that Hamas officials had denied permission to Fatah officials in Gaza City, where rallies commemorating the passing of Arafat were being organized.

2006 was the last time large events commemorating the death of the former Palestinian leader, with then Prime Minister Ismail Haniyeh hosted a small rally in Gaza City, where he accused Israel of poisoning Arafat. The event was more of a political rally addressing concerns about the unity government at the time, not resembling celebrations in the West Bank.