By Mohammed Assadi

RAMALLAH, West Bank (Reuters) - Palestinian President Mahmoud Abbas's announcement on Thursday that he did not want to stand for re-election in January could be a tactic rather than a serious declaration of intent -- though he flatly denies that.

Abbas, his political strategy long based on negotiating the creation of a Palestinian state, felt betrayed and embarrassed this week when the United States appeared to soften its position on Israeli settlement in the West Bank, part of the territories in which the Palestinians want to establish their state.

* Abbas's comments appeared designed to encourage Washington to put new pressure on Israel over settlement building. With his legitimacy already contested by the Hamas Islamists who seized control of Gaza two years ago, Abbas cannot give way to U.S. calls to begin negotiations with Israel without something close to the settlement freeze he set out as a condition for talks.

"He is serious about saying 'Enough is enough: either look carefully at the Palestinian plight or I am not willing to keep working for peace forever'," said analyst Samir Awad.

"It's a tool of pressure directed at the Americans and it does not mean he will resign in the current circumstances. Maybe later," said George Giacaman, a lecturer at Birzeit University in the West Bank.

Basem Ezbidi, a political analyst at Birzeit, said: "The Israelis may take this seriously and start offering something."

* The fact that the Fatah movement has no obvious alternative to Abbas means it will be hard for the 74-year-old not to stand, even if he does not want to. Stepping down would further weaken the movement, which was defeated in a 2006 legislative election by Hamas, which opposes U.S.-led peacemaking efforts.

Abbas also has a close circle of aides who would be unwilling to see a dramatic shift in the political landscape at the moment.

"He wants to quit but we will not allow him because we do not have an alternative," said a close Abbas confidant.

* Among potential successors in Fatah, relatively youthful former security chief Mohammad Dahlan has been building up his following, but as a native of the Gaza Strip, now under Hamas control, his appeal is limited in the West Bank. Another contender, Marwan Barghouthi, is serving a life sentence in an Israeli prison. Washington and its Western allies make little secret of their admiration for Prime Minister Salam Fayyad, but the former World Bank and IMF technocrat is not from Fatah and has little clear electoral base, despite the popularity of some of his efforts to improve security and the economy.

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