DAMASCUS - Hamas sees no political gain in recognising Israel and will resist doing so despite Western sanctions on the Palestinian government it leads, the Muslim movement's leader Khaled Meshaal said late on Thursday.

Hamas leader Khaled Meshaal speaks during a meeting with supporters in Damascus October 12, 2006. [Reuters]

"Hamas will not surrender to those wanting to mount a coup against it, will not recognise Israel and will not abandon armed resistance," Meshaal said at a ceremony to mark the start of the final 10 days of Ramadan, the Muslim holy month.

Hamas' refusal to participate in any administration that recognises Israel has contributed to preventing the formation of a Palestinian coalition government that could negotiate with Israel and do business with the West.

Aides to Palestinian President Mahmoud Abbas have warned he may appoint an emergency government or call early elections after the latest efforts to form a unity government withy Hamas failed.

The United States, Israel's chief ally, and the European Union say any Palestinian government must recognise Israel, renounce violence and accept previous peace accords.

But Meshaal, who lives in exile in Syria, said the hard line of Hamas, whose charter calls for the destruction of Israel, would eventually pay off.

"Let's ... force Israel to compromise. Let us keep some cards in our possession. We have seen the fate of those who accepted recognition as a precondition for negotiations. They have gained nothing," he said.

"Does non-recognition prevent political dialogue? China doesn't recognise Taiwan. States sometimes don't recognise each other yet still have ties," he added.

He said Hamas could live peacefully along side Israel if the Jewish state gave back Palestinian land occupied since 1967, including East Jerusalem, and gave refugees their rights.

Meshaal said a Palestinian unity government with Abbas' Fatah faction was still possible despite the collapse of mediations and an upsurge in violence between the two groups.

"(A joint Palestinian government) could be formed if we listen to our prisoners, the cries of our wounded and the souls of our martyears," he said.