Ziad Abu Ein, a Palestinian Cabinet member, died on Wednesday shortly after an Israeli border policeman shoved and grabbed him by the throat during a protest in the occupied West Bank.
Abbas met officials from his Fatah movement and the Palestine Liberation Organisation late in the evening to consider a response and said all options were open.
In the session, Abbas held up a photo of the Israeli officer grabbing Abu Ein's throat. Abu Ein, 55, was among scores of Palestinian and foreign activists who were confronted at an Israeli checkpoint while heading to a demonstration against Jewish settlements in the occupied territory.
Around 30 Israeli soldiers and border policemen fired tear gas and sound grenades at the group and a scuffle ensued in which a border policeman pushed Abu Ein and grabbed his neck firmly with one hand.
Footage of the incident did not show Abu Ein responding with any violence.Minutes later the minister began to look faint and fell to the ground clasping his chest. He died on his way to hospital.
Abdullah Abu Rahmeh, a Palestinian activist who was at the protests, told Abu Ein fell into a coma after an Israeli security officer beat him with his helmet.
"It was a peaceful protest; the Israeli soldiers don't know how to deal with this type of action and they used violence to threaten us," he said. An autopsy to determine the cause of his death is being carried out with Palestinian, Israeli and Jordanian pathologists present.
The incident comes at a time of heightened tension between Israel and the Palestinians, following months of violent unrest in Jerusalem, Tel Aviv and the Israeli-occupied West Bank.
The Israeli military said it was sending two battalions of soldiers and two companies of paramilitary border police to the West Bank as reinforcements.
After news of Abu Ein's death spread, clashes broke out in a refugee camp near Ramallah and an Israeli soldier shot and critically wounded a Palestinian youth, Palestinian medics said.
In Turmus Aya town, near where the minister died, three minors were arrested during a rally protesting his death, the Palestinian WAFA news agency reported.
Ramallah shops were shuttered for the day in protest at the minister's death.
Abu Ein, who was convicted of killing two young Israelis in a bomb attack in 1979 and released as part of a prisoner swap in 1985, was a vocal opponent of Israel's settlement expansion in the West Bank, which Palestinians want as part of an independent state together with the Gaza Strip and East Jerusalem.
A leader of Palestinian civil society groups for decades, Abu Ein was a regular attendee of non-violent protests and was appointed this year to head a government-backed protest group, the Committee to Resist Settlements and the Wall.
UN Secretary-General Ban Ki-moon called on the Israeli authorities to "conduct a swift and transparent investigation" into the circumstances of what he called the "brutal death" of the minister.The US made a similar demand for a fair probe.
Shortly before his death, Abu Ein spoke to television reporters, sounding hoarse and short of breath.
"This is the terrorism of the occupation, this is a terrorist army, practising its terrorism on the Palestinian people," he told the official Palestine TV.
"We came to plant trees on Palestinian land, and they launch into an attack on us from the first moment. Nobody threw a single stone."
Participants said they planned to plant olive tree saplings on land belonging to a villager who has repeatedly been barred from reaching his property by Israeli troops citing concern about frictions with the settlers.