Saturday's decision would pave the way for a younger generation of commanders to take over.
Abbas had been criticized for not moving fast enough to reform his flabby security apparatus, seen as largely ineffective in reining in Palestinian militants. He was spurred into action after gunmen shot up his offices earlier this week and rampaged through the town of Ramallah.
The Palestinian leader, who was elected in January, also took first steps against widespread government corruption, officials said. An investigation was launched against three senior officials in the Finance Ministry and one in Abbas' office, and charges were expected to be filed soon, the officials said.
With the security reform and the anti-corruption campaign, Abbas apparently hopes to improve the prospects of his Fatah Party in parliamentary elections in July. Polls indicate the Islamic militant Hamas, which boycotted elections in the past, could defeat Fatah, which is widely seen as tainted by corruption.
Voters may not necessarily support Hamas' ideology - it rejects peace with Israel and advocates violence - but plan to back the Islamists to protest years of mismanagement by Fatah. Some gunmen affiliated with Fatah have also been involved in kidnapping, extortion and other crimes against Palestinians.
In taking a tough stance, Abbas hopes to turn the situation around.
"We will not allow anyone to take the law into his own hands and sabotage our situation," Abbas said, criticizing the security forces for failing to do their jobs.
The international community, led by the United States, has long demanded that the Palestinians streamline their corruption-plagued security forces, which under the late Yasser Arafat ballooned into nearly a dozen rival branches with often overlapping authorities.
Abbas had come under pressure at home to take action after gunmen rampaged through his government complex and three restaurants in Ramallah on Wednesday. The gunmen were loyal to West Bank security chief Ismail Jaber, who was relieved of his command on Saturday in Ramallah after submitting his resignation a day earlier. The security chief in Ramallah, Younis Al-Aas, was also dismissed.
In a meeting with about 50 intellectuals, religious leaders and business people on Saturday evening, Abbas said the gunmen had used the government compound, known as the Mukataa, for more than four years "to commit crimes and to come back to it."
Arafat had sheltered more than two dozen militants, many of them wanted by Israel, in the Mukataa. Some of the gunmen were mainly involved in attacking Israelis, while others also engaged in violence against Palestinians.
"I want to distinguish between nationalists and criminals," Abbas said in remarks broadcast on Palestinian TV."
Abbas also announced on Saturday he would enforce a recent law requiring security personnel to retire at 60.
(The Associated Press)
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