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FILE PHOTO - Palestinian members of Hamas's armed wing take part in the funeral of a senior militant in Gaza City March 25, 2017. REUTERS/Mohammed Salem/File Photo

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By Nidal al-Mughrabi and Tom Finn

GAZA/DOHA (Reuters) - The Palestinian Islamist group Hamas on Monday dropped its longstanding call for Israel's destruction, but said it still rejected the country's right to exist and backs "armed struggle" against it.

In a policy document presented in Doha by its leader Khaled Meshaal, Hamas also said it would end its association with the Muslim Brotherhood, a move apparently aimed at improving ties with Gulf Arab states and Egypt, which view the Brotherhood as a terrorist group.

Israel responded to the announcement by accusing Hamas of trying to "fool the world", while the group's main Palestinian political rival, the Fatah faction of President Mahmoud Abbas, also reacted coolly to the policy shift.

The publication of the policy document comes two days before Abbas is due to visit Washington, and days after President Donald Trump told Reuters he may travel to Israel this month and sees no reason why there should not be peace between Israel and the Palestinians.

"We don't want to dilute our principles but we want to be open. We hope this (document) will mark a change in the stance of European states towards us," Meshaal told reporters.

Hamas, which has controlled the Gaza Strip since 2007, said in the document it agreed to a transitional Palestinian state within the borders of 1967, when Israel captured Gaza, the West Bank and East Jerusalem in a war with Arab states. Israel withdrew from Gaza in 2005.

"Hamas advocates the liberation of all of Palestine but is ready to support the state on 1967 borders without recognising Israel or ceding any rights," said Meshaal, in a shift that brings Hamas more into line with the position of Fatah.

"TERROR TUNNELS"

Israel said the document aimed to deceive the world that Hamas was becoming more moderate.

"Hamas is attempting to fool the world but it will not succeed," said David Keyes, a spokesman for Israeli Prime Minister Benjamin Netanyahu. "They dig terror tunnels and have launched thousands upon thousands of missiles at Israeli civilians. This is the real Hamas."

Founded in 1987 as an offshoot of the Muslim Brotherhood, the banned Egyptian Islamist movement, Hamas has fought three wars with Israel since 2007 and has carried out hundreds of armed attacks in Israel and in Israeli-occupied territories.

Many Western countries classify Hamas as a terrorist group over its failure to renounce violence, recognise Israel's right to exist and accept existing interim Israeli-Palestinian peace agreements.

Meshaal said Hamas's fight was not against Judaism as a religion but against what he called "aggressor Zionists".

Fatah spokesman Osama al-Qawasme upbraided Hamas for taking decades to join Fatah in accepting a Palestinian state within the 1967 borders, a position Hamas used to criticise Fatah for.

"Hamas's new document is identical to that taken by Fatah in 1988. Hamas is required to make an apology to Fatah after 30 years of accusing us of treason for that policy," Qawasme said.

It remained unclear whether the document replaces Hamas's 1988 charter, which calls for Israel’s destruction. Meshaal said the document would "guide Hamas's daily political activity".

Abbas's Palestinian Authority has engaged in peace talks with Israel on the basis of seeking a Palestinian state within the 1967 borders, although the last, U.S.-mediated round collapsed three years ago.

There was no immediate comment on Monday from Egypt and Gulf Arab states to the Hamas document.

"For Hamas ... it's a signal of their desire to align with conservative Sunni elements in the region and create some immunity (from Saudi pressure)," said Beverley Milton-Edwards, a visiting fellow at the Brookings Doha Centre and author of a book on Hamas.

But while the document could strengthen Hamas's position in the Palestinian Territories and the Middle East, she said, it was unlikely to lead "to any definitive swing in opinion in the group's favour in the United States or even Europe."

Meshaal said Hamas remained part of the Muslim Brotherhood's "intellectual school" but was "an independent Palestinian organisation".

U.S.-allied Arab states including Egypt, the United Arab Emirates and Saudi Arabia classify the Brotherhood as a terrorist organisation. The 89-year-old Brotherhood held power in Egypt for a year after a popular uprising in 2011, but was then removed by the army after mass street protests.

The Brotherhood denies links with Islamist militants and advocates Islamist political parties winning power through elections, which Saudi Arabia considers a threat to its system of absolute power through inherited rule.

(Additional reporting by Maayan Lubell in Jerusalem and Ali Sawafta in Ramallah; Writing by Tom Finn; Editing by Gareth Jones)

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