RAMALLAH, West Bank, Feb 8 (JMCC & Reuters) - The West Bank-based Palestinian government on Monday called local elections for July in a move the Hamas Islamist group said it would block in the Gaza Strip.

Prime Minister Salam Fayyad's cabinet decided to hold the municipal elections on July 17.

New elections will strengthen Palestinian democracy, and build Palestinian institutions according to the plan of the government, minister of local government Khaled Kawasmi told JMCC.

The Fateh movement, which is represented in Fayyad's government in the West Bank, welcomed the move and said it would take part.

Hamas, which controls the Gaza Strip, said Fayyad and his government were illegitimate and not in a position to call a vote. Any elections could only take place after national reconciliation, spokesman Fawzi Barhoum told Reuters.

Hamas representative Mushir al-Masri said the move disrupts attempts by independent parties to negotiate a Palestinian reconciliation, and that Hamas would not allow a vote to take place in the Gaza Strip.

Hamas and Fatah have been in a state of open hostility since 2007, when the Islamist group seized control of the Gaza Strip.

Legislative and presidential elections called in January by Palestinian President Mahmoud Abbas, the leader of Fatah, were canceled due to a ban by Hamas on participation in the Gaza Strip.

An Egyptian plan aimed at ending the Palestinian division set legislative and presidential elections for June. Fateh leader Abbas, who is supported by Cairo, signed the document. Hamas has refused to, citing reservations.

The Palestinians last held local elections in 2005, shortly before a legislative election in which Hamas defeated Fatah -- an outcome which ultimately led to the deep Palestinian national division.

There are 335 local councils of various sizes in the occupied West Bank and Gaza Strip.