Abbas, however, stopped short of accompanying his threat with a deadline or giving any specifics, leaving room for diplomatic manoeuvres to refocus the world's attention on the Israeli-Palestinian conflict.
Abbas did not say how he will move forward. He also avoided mentioning a mainstay of Israeli-Palestinian relations, security coordination between his security forces and Israeli forces in the West Bank against a shared enemy, the Islamic militant group Hamas.
In a statement issued by his office, Netanyahu said Abbas' "speech of lies encourages incitement and unrest in the Middle East."
Netanyahu called on Abbas to "act responsibly" and answer his proposal for direct negotiations with Israel without any preconditions.
More From This Section
"The fact that time after time he (Abbas) does not respond is the best proof that he has no intention of reaching a peace agreement," the statement said.
Abbas' comments reflect deep frustration, even desperation. It came after years of paralysis in attempts to negotiate Palestinian statehood with Israel and several months after Netanyahu formed a right-wing government that has continued settlement expansion on war-won lands the Palestinians want for their state.
His hopes of creating a Palestinian state through negotiations with Israel have been derailed. A new poll shows that a majority of Palestinians want the 80-year-old leader to resign and dissolve his self-rule government, the Palestinian Authority. Many no longer believe a two-state solution is realistic and support political violence.
Abbas had threatened to drop a "bombshell" in the speech prompting speculation he would sever ties with Israel over its settlement expansion and other hard-line policies.
He said today that Israel's refusal to commit to agreements signed "render us an authority without real powers.