Tel Aviv, Ramallah - Israel Monday rejected a warning by the Palestinian top negotiator that the Palestinians could abandon efforts to reach a two-state solution to their decades-old conflict, if Israel continued "sabotaging" progress toward a peace deal.

Ahmed Qureia, who heads the Palestinian negotiating team with Israel, said Sunday night the Palestinians might push for a "bi-national," joint Israeli-Palestinian state instead.

"The Palestinian leadership has been talking to its people and the world for over 30 years about an independent Palestinian state on the June 4, 1967 borders, but Israel keeps sabotaging this option," Qureia told top Fatah leaders in Ramallah.

"If Israel continues to reject this, then the alternative choice of the Palestinian people and its leadership is a bi-national state," he threatened.

He said the negotiations with Israel were "continuing" and "serious," but added, "We have not reached an agreement on any of the final status issues, which shows the difficulties we are facing."

Qureia's remarks were carried in a statement published on the Palpress news site, run by officials of his and Palestinian President Mahmoud Abbas' secular Fatah party.

The notion of a bi-national state has been long popular with left-wing Palestinian intellectuals.

But the debate about it has intensified over the past months as many among them have grown increasingly frustrated at what they believe is a lack of progress in the Israeli-Palestinian negotiations on a two-state solution.

Some have accused Israel of dragging out the negotiations and putting off a solution.

Israeli Foreign Ministry spokesman Arye Mekel, however, denied the accusation.

"It takes two to tango and we are negotiating and we will continue to negotiate. It's not such a easy thing to solve, this problem. It's been around for 100 years," he told Deutsche Presse-Agentur dpa. "But it's a positive thing that we sit together and talk.

"Our policy is well known. We believe in the two-state solution: One state for the Palestinians living side by with Israel in peace according to the road map and according to the Annapolis programme," he added.

"The Palestinians also believe in that or they wouldn't be sitting with us day in and day out."

Israel has an Arab minority of almost 1.5 million, who live alongside 5.5 million Jews.

Most of them are Palestinians, who stayed when the Jewish state was founded in 1948 and given Israeli citizenship. Many others had fled to the West Bank, Gaza and neighbouring Arab countries.

Today, they would form nearly 5.3 million, combined with the 3.8 million Palestinians living in the occupied territories.

While in Israel, the debate on a bi-national state has been relegated to the fringes, it is supported by more than 23 per cent of the Palestinians living in the West Bank and Gaza, according to the latest survey published in March by the Palestinian Jerusalem Media and Communications Centre (JMCC).

More Palestinians, however, (over 47 per cent) continue to support a two-state solution, according to the poll, which questioned nearly 1,200 Palestinians in the West Bank and Gaza and had a margin of error of 3 per cent.

Some 12 per cent support a Palestinian state or an Islamic state on all of what is now Israel and the West Bank and Gaza, while the rest is undecided.

The radical Hamas movement ruling Gaza is the strongest advocate of an Islamic state in all of historic Palestine.

Hamas spokesman Sami Abu Zuhri said Monday Qureia's remark "reflects the breakdown" of Abbas' Ramallah-based administration and the Fatah leadership.

"Hamas does not recognize Israel and does not accept its existence on an inch of the Palestinian land, and if this generation is not able to liberate the land, this does not mean we should give up on our right to the land," he said in a statement from Gaza. (dpa)