Nov. 6 (Bloomberg) -- Palestinian Authority President Mahmoud Abbas’s decision to withdraw from elections slated for January added a new hurdle to Middle East peace efforts and triggered speculation about who might succeed him.

“This is a sign that things are not going well in terms of the peace process,” said Hani Sabra, a Middle East analyst for the Eurasia Group, a political-risk consulting firm in New York.

Abbas said in a televised speech from his headquarters in Ramallah yesterday that he has “no desire” to be a candidate in the next presidential election. Addressing doubters who suspect he’ll change his mind, the 74-year-old Palestinian leader said, “This decision is not a bargaining tactic.”

Efforts by the U.S. to get Abbas and Israeli Prime Minister Benjamin Netanyahu back to the negotiating table, including a trip to the region this week by Secretary of State Hillary Clinton -- have failed so far. The question of who will succeed Abbas as head of the secular Fatah party and president of the authority also looms over the peace process.

Among those most discussed are Prime Minister Salam Fayyad, who does not belong to a political party, and Marwan Barghouti, now serving a life prison sentence in Israel after being convicted of plotting a string of terrorist attacks. The Palestinians have demanded that Barghouti be freed in any future peace deal.

“If he was released he would be the leading candidate within Fatah,” said Mkhaimar Abusada, a political scientist at Al-Azhar University in Gaza City. Still, he said it’s hard to consider Barghouti as a candidate while he’s still behind bars.

Criticism of Abbas

David Schenker, director of the Program on Arab Politics at the Washington Institute for Near East Policy, pointed to Abu Maher Ghneim, a Fatah leader, as another candidate to take Abbas’s place.

Abbas has faced growing Palestinian criticism, especially last month since agreeing to postpone a United Nations debate on a report accusing Israel and Hamas of committing war crimes during their three-week conflict in the Gaza Strip earlier this year. He later reversed himself and the UN General Assembly endorsed the report last night.

Palestinians took to the streets of Ramallah and Jenin, also in the West Bank, in support of Abbas and called on him to reverse his decision, the Bethlehem-based Maan news agency said.

Abbas, who succeeded Yasser Arafat as president of the authority in 2005, said two weeks ago that he wants to hold new presidential and legislative elections on Jan. 24.

PA Legitimacy Challenged

The Islamic Hamas movement, which controls Gaza, has challenged the legitimacy of Abbas’s West Bank-based government, and Egyptian-mediated efforts to reconcile them haven’t been successful. Hamas said last month it will bar Gaza residents from voting in January elections.

Abbas “has failed miserably,” a Hamas spokesman, Taher al-Noono, told the Egyptian state-run Nile News. He called Abbas’s announcement a “maneuver for the international community to obtain gains that could help him run again.”

With Hamas opposed to elections, it is unclear whether they will be held in January. If they aren’t, Abbas may announce then that his term has expired and he is no longer president, Abusada said.

“That will leave a vacuum,” he said.

Clinton drew criticism from Arab leaders for describing as “unprecedented” a proposal by Israeli Netanyahu to restrict, rather than halt, settlement building in the West Bank.

Arab Governments’ Outcry

The outcry from Arab governments over Clinton’s Oct. 31 remark overshadowed her Mideast tour and came as Arabs pressed at the UN for prosecution of Israeli officials over the Gaza offensive.

For three days starting at a meeting of Arab leaders in Morocco Nov. 2, Clinton insisted that U.S. policy on Israeli settlements hadn’t changed.

“We do not accept the legitimacy of settlement activity,” she said this week in Cairo.

Hamas seized control of Gaza in June 2007, routing the Fatah forces of Abbas. Hamas is considered a terrorist organization by Israel, the U.S. and the European Union.

White House Press Secretary Robert Gibbs said the administration has “tremendous respect for President Abbas” and called him “an important and historic leader for the Palestinian people and a true partner for the United States.”

“Whatever he decides, we look forward to continuing to work with him” to “make the lives of Palestinians better,” Gibbs said yesterday at the White House.

To contact the reporters on this story: Saud Abu Ramadan in Jerusalem at sramadan@bloomberg.net; Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net.

Last Updated: November 6, 2009 08:41 EST