Speaking at the congress, Mr Abbas said Palestinians sought peace with Israel but "resistance" remained an option.
Fatah is widely seen as corrupt and ineffective, the BBC's Middle East correspondent Tim Franks says.
Our correspondent says there will be close interest in who is elected to the faction's main internal positions of power.
Some 2,000 delegates are convening for Fatah's three-day congress in the West Bank town of Bethlehem.
An estimated 400 Fatah delegates who live in the Gaza Strip were banned from travelling to Bethlehem for the conference by the territory's rulers, Hamas.
Israel had allowed about 500 delegates who live abroad to travel to the congress.
Commenting on the conference, Israeli government spokesman Mark Regev, said: "Israel seeks peace and reconciliation with our Palestinian neighbours - reconciliation that must be based on both sides recognising the rights of the other: Israel recognising that the Palestinians have national rights, and the Palestinians recognising that Jews have national rights too."
Renewal
The congress will be discussing a new platform that seeks to rejuvenate the movement.
Another key test will be whether the conference alters the wording of Fatah's charter, which refers to eradicating Israel.
The draft document proposes to keep the option of "armed struggle" if peace talks with Israel fail.
It also says that an Israeli settlement freeze in the West Bank is a precondition for any further talks with Israel.
The congress comes as the US is hoping to broker a new round of peace talks between the Israelis and Palestinians.
Maybe more important is the issue of who the delegates elect to the internal positions of power, our correspondent says.
He adds that - in the words of one reformer - the current leaders are like princes in the Gulf.
Opinion polls still suggest that Fatah is currently more popular than its main rival - the Islamist Hamas movement which controls the Gaza Strip.
But without a strong infusion of freshness, in the long-term Palestinians say that Fatah will only decline, our correspondent says.
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