Khaled Meshaal, leader of the Palestinian Islamist group, called on leaders at the opening of an emergency meeting on Gaza in Doha to cut all ties with the Jewish state.
"Despite all the destruction in Gaza, I assure you: we will not accept Israel's conditions for a ceasefire," Meshaal told the meeting in Doha, which was attended by the presidents of Syria, Iran and Lebanon. Heavyweights Saudi Arabia and Egypt were absent.
The meeting in Qatar conflicted with another meeting by Arab foreign ministers in Kuwait to discuss the three-week-old Israeli offensive that has highlighted deep splits in the Arab world over Gaza, where the death toll has exceeded 1,100.
Qatar had proposed hosting a special Arab summit on Gaza but met with resistance from regional powers Egypt and Saudi Arabia, who said they preferred to discuss the situation as part of the previously scheduled economic summit in Kuwait on Monday.
Syrian President Bashar al-Assad, whose country has been engaged in indirect peace talks with Israel, said an Arab initiative for peace with Israel was "dead".
He said Arab countries should end all "direct and indirect" ties with the Jewish state in protest at its offensive in Gaza.
"I consider the Arab initiative with Israel "dead", he said.
The 22-member Arab League says Doha has failed to secure the quorum of 15 required for a formal Arab Summit, but Qatar has gone ahead with a broad consultative meeting that has attracted Hamas, the Iranian and Syrian presidents and Turkish officials.
Arab divisions
Adding to the confusion, U.S.-allied Gulf Arab leaders held an emergency meeting on Gaza late on Thursday, in an apparent bid to pre-empt Qatar's diplomatic efforts.
The Gulf Arab leaders promised at their Riyadh meeting that the Arab summit in Kuwait would discuss the Gaza offensive and noted that president-elect Barack Obama may change U.S. policy.
"The Arab situation has been very chaotic and this is regrettable," Arab League Secretary-General Amr Moussa told reporters in Kuwait.
At the morning session, Saudi Foreign Minister Prince Saud al-Faisal called for more support for Egyptian efforts to mediate a ceasefire and increased diplomatic pressure on Israel to ensure the implementation of a U.N. Security Council resolution calling for an end to the violence in Gaza.
The foreign ministers' meeting had been scheduled by Kuwait even before Israel's Gaza offensive, but Qatar felt the severity of the situation required an earlier meeting at leaders' level.
Qatari Sheikh Hamad bin Khalifa al-Thani, whose country has low-level ties with Israel and ties to Hamas, said the Doha summit would review diplomatic and economic ties to Israel, raising the prospect the Qataris could use their meeting as a platform to announce a suspension of ties with the Jewish state.
Sheikh Hamad also pledged $250 million to rebuild Gaza and said the talks would raise the possibility of suspending an Arab peace initiative, though any move on that front needs a quorum.
The flurry of rival Arab meetings reflects the Arab divide between Egypt, Saudi Arabia and their allies on one side, and Syria, Qatar and their allies on the other. It also risks further undermining the Arab League, already seen by many ordinary Arabs as a toothless body.
Syria and Qatar, which recently patched up once-frosty ties with its Saudi neighbour, are more sympathetic toward Palestinian Islamist group Hamas, which won a 2006 election and has ruled Gaza since 2007, after routing fighters from Palestinian President Mahmoud Abbas's Fatah faction.
But Egypt, Gaza's only Arab neighbour, has said it will not open the border for normal traffic without the presence of Abbas's forces. It has faced criticism for cooperating in the Israeli blockade of the Palestinian territory.
With bloody images of Palestinian casualties plastered across Arab television screens for the past 21 days, public demands have grown for Arab leaders to take a stronger stand.
Conservative Arab governments are wary of summits at times of crisis because they are reluctant to pass confrontational resolutions which would meet the expectations of public opinion.
(Writing by Lin Noueihed, Editing by Samia Nakhoul)
