(Releads on Egyptian position) By Jonathan Wright CAIRO, June 15 (Reuters) - Egypt backed Palestinian President Mahmoud Abbas on Friday in the conflict between his Fatah movement and the Islamist group Hamas, saying all Palestinians should rally behind him as leader. An Egyptian government statement also condemned Hamas for taking control of the Gaza Strip on Thursday and undermining what it called legitimate Palestinian institutions. Egypt released the statement as Arab foreign ministers met in Cairo to work out a common position on the conflict between Fatah and Hamas, which has reached a crisis point. Abbas has dismissed the government led by Ismail Haniyeh of Hamas, but Haniyeh has said he will go on working. The statement said: "The Egyptian government calls on all Palestinians ... to rally around the legitimate leadership of the Palestine Liberation Organisation and the Palestinian National Authority ... led by President Mahmoud Abbas." Egypt also called on foreign governments to end what it called their policy of blockading the Palestinian territories. The United States and the European Union have imposed restrictions on financial support for Palestinian institutions. Another conservative Arab government, Saudi Arabia, which brokered a unity government deal between Fatah and Hamas in February, reproached both sides for breaking their commitments and pressed them to return to the agreement. But a speech by Saudi Foreign Minister Saud al-Faisal did not take sides overtly with other party in the conflict. Prince Saud told fellow Arab foreign ministers the latest Palestinian infighting had served the interests of Israel. "Today the Palestinians have come close to putting by themselves the last nail in the coffin of the Palestinian cause," he said. "The Palestinian leaderships must now issue an order, not just to stop the fighting immediately but also to outlaw fighting, and to return to dialogue." Diplomats say Saudi Arabia has tended to favour the Fatah movement of Palestinian President Mahmoud Abbas but not to the same extent as the governments of Egypt and Jordan. Prince Saud added: "It would be best for our Palestinian brothers to return to their commitment to the Mecca agreement (in February) and work to carry it out." The Mecca agreement set the framework for the national unity government which Abbas dismissed on Thursday. Fatah led the Palestinian delegation to the meeting in Cairo and asked Arab governments to make demands of its rivals in Hamas, Arab diplomatic sources said. Hamas is not taking part because Abbas has the right to name the delegation.
