President Mahmoud Abbas plans to discuss the fate of the Palestinian Authority with his rivals Hamas next month, raising questions over its future with the peace process at a dead end.

The remarks make clear Abbas is seriously mulling the future of the Palestinian Authority (PA), which was set up as a state-in-waiting 17 years ago but is now seen by critics as compromised body that eases the burden of occupation for Israel.

"The Authority is not an authority. People and Palestinian institutions are asking me about the benefits of the continuation of the Authority," Abbas said in comments to his Fatah party published by WAFA news agency on Thursday.

"We want to answer this question and therefore it will be one of the subjects we will discuss with our brother Khaled Meshaal, leader of Hamas," Abbas said, according to a text of the address that he delivered on Wednesday.

"The question we must answer is where are we heading?"

Abbas, 76, offered no clues about what he could do to the PA, which depends on the financial support of donors including the European Union, the United States and Arab governments.

Today, its mandate is limited to patches of West Bank land encompassing the main Palestinian cities and villages, territory handed to the PA under interim peace agreements in the 1990s.

The West Bank, along with the Gaza Strip and East Jerusalem are territories Israel captured in a 1967 war and where the Palestinians aim to found an independent state.

Peace talks aimed at bringing about independence are at a standstill because of a dispute over Israel's expansion of settlements in East Jerusalem and the West Bank.

NOVEMBER MEETING WITH HAMAS

Abbas said last month in a speech to the U.N. General Assembly that settlement expansion threatened to destroy the chances of the establishment of a viable Palestinian state and to kill off the Palestinian Authority.

Some Palestinians say the PA should be dissolved completely, a move they say would hand Israel full responsibility for governing all the Palestinians in the territories it controls.

Now, the PA takes care of civilian affairs in the main Palestinian population centres, where it also manages internal security -- responsibilities critics say Israel should be handed if there is to be no Palestinian independence any time soon.

Others say that is unrealistic, arguing the Palestinians would suffer from such a step. The PA employs 150,000 people and there is no guarantee Israel would step in were it to disappear.

The role of the PA was part of a broader question the Palestinians must address, Abbas said. This included their next steps at the United Nations, where on Sept. 23 Abbas requested admission for Palestine as a full member state. Fierce U.S. opposition to the move is destined to thwart it.

Abbas said he planned to meet the Hamas leadership at the start of November. It will be his first meeting with Meshaal since May, when the two men concluded a deal aimed at reuniting their rival governments in the West Bank and Gaza Strip.

Hamas seized control of the Gaza Strip from Abbas in 2007 and has governed there ever since, building its own administration and security forces, while Abbas continues to head the Palestinian Authority in the West Bank.

Since signing the deal, Fatah and Hamas have failed to make progress towards implementation.