We've lost so many lives now that it's obvious that stones no longer work

Palestinian youth

The call came as the Israeli Prime Minister, Ehud Barak, held talks late into Saturday night on the possible formation of an emergency government with the opposition right-wing Likud party.

Mr Barak is expected to meet the Likud leader Ariel Sharon on Sunday, ahead of a parliamentary session on Monday when he could face efforts to oust his minority government.

Israeli Foreign minister Shlomo Ben-Ami is set to leave for Europe and the US on Monday to discuss prospects for ending the violence.

Barak faces a potential crisis on Monday

But correspondents say there are few signs that either side is ready to take a break from the violence and the chances of meaningful dialogue look increasingly distant.

The Israelis have held firm on their promise to meet any violence from the Palestinian side with force.

At least 140 people have been killed in the clashes, all but of eight them Arabs.

The crisis was sparked off on 28 September by a controversial visit by Mr Sharon to a holy site in Jerusalem, at a time of intense Palestinian frustration with poor progress in the peace process.

Daily violence

In a statement issued on Saturday, Fatah said it should be the "vanguard of the people in confrontations against [Israel]".

An Israeli soldier watches a West Bank village

"Fatah calls on its people to continue and escalate the Intifada, to strengthen internal unity and to upgrade the level of national readiness," it said in a statement.

Clashes persisted in the West Bank and the Gaza Strip on Saturday.

In what is now a daily cycle, young Palestinian men - some barely teenagers - hurl stones and firebombs at Israeli troops, who respond with rubber-coated bullets, live ammunition and tear-gas.

But Palestinians in the territories also face other problems - more than 100,000 people who work in Israel cannot travel to work.

The violence has a repeating daily cycle

Some of them are the sole breadwinners in their families.

The unrest has also damaged the Israeli economy, with losses estimated at more than $1bn.

Most affected is the tourism industry, as well as sectors such as agriculture that depend on Palestinian labourers.

Anger at funerals

The Israeli military has predicted that the unrest could go on for months.

Thousands of Palestinian mourners turned out on Saturday for funerals of those killed the day before.

Funerals have become rallying points

Correspondents say the funerals have become rallying points in which the whole cycle of recrimination begins again.

A Palestinian youth interviewed by Reuters news agency said the funeral of a neighbour had spurred him to more violence, going from throwing stones to hurling a molotov cocktail at Israelis.

"We've lost so many lives now that it's obvious that stones no longer work," said Amer, 20.

However, Saturday was relatively quiet after Friday's fierce fighting, when Israelis helicopter gunships attacked a West Bank village, reportedly in response to Palestinian shooting at the Jewish settlement of Gilo.