DAMASCUS, Nov 27 (Reuters) - Hamas leader Khaled Meshaal said on Saturday that his group faced huge challenges in the West Bank as a force against Israel.

Armed struggle has a powerful appeal among the inhabitants of the occupied territory, where the rival Fatah faction has been extending influence since a civil war with Hamas in 2007, Meshaal told a conference in the Syrian capital.

The resistance is facing huge challenges, especially in the West Bank, Meshaal told a meeting of leading pro-Hamas politicians, writers and thinkers opposed to the U.S.-supervised peace process between the Palestinians and Israel.

Our inalienable rights are threatened with extinction if the scene in the West Bank does not change by launching the resistance against the Israeli occupation and the settlements, he added.

The Palestinian Authority, dominated by Fatah, intensified a campaign of arrests against Hamas after its fighters killed four Jewish settlers in the West Bank on Aug. 31.

The attack was on the eve of the launch of direct Middle East peace talks, which subsequently broke down over Israel's refusal to meet demands by Palestinian Authority President Mahmoud Abbas to freeze Israeli settlement building.


DAYTON'S FORCES

Meshaal, who lives in exile in Syria, said only armed resistance would keep the Palestinian cause alive, despite Western aid to Abbas and his forces.

The Palestinian people will not be bribed. They will not be cowed by Dayton's forces, he said, referring to Lieutenant General Keith Dayton, U.S. Security Coordinator for Israel and the Palestinian territories, who heads training of 8,000 members at the core of the Palestinian Authority's security apparatus.

Meshaal said Hamas opposes the U.S.-supervised Middle East talks as they would result in a selloff of Palestinian rights, including the territory that Israel has occupied since the 1967 Middle East War and the right of Palestinian refugees to return.

We are not talking about a business deal or making a profit. Our only capital is the land, identity and dignity, Meshaal said.

When there is such an imbalance of power (between Israel and the Palestinians) negotiations become a process of daily humiliation, he added.

Renewed Egyptian efforts in the last several months to narrow difference between Hamas and Fatah have failed. (Writing by Khaled Yacoub Oweis)