Agencies

PALESTINIAN PRESIDENT MAHMOUD Abbas has rejected an Israeli peace proposal because it does not provide for a contiguous Palestinian state with Jerusalem as its capital, Abbas' office said on Tuesday.

Nabil Abu Rudeina, Abbas' spokesman, told the official WAFA news agency Israeli Prime Minister Ehud Olmert's plan showed a "lack of seriousness".

Olmert's proposal does not offer a solution to competing claims to the holy city of Jerusalem, and would only be implemented once Abbas reined in militants and reestablished control of the Gaza Strip, which Hamas seized a year ago.

Under the proposal, Israel would return to the Palestinians some 92.7 per cent of the occupied West Bank, plus all of the Gaza Strip, according to Western and Palestinian officials briefed on the negotiations.

In exchange for West Bank land that Israel would keep, Olmert proposed a 5.3 per cent land swap giving the Palestinians a desert territory adjacent to the Gaza Strip.

Olmert's proposal first emerged several months ago and was published in detailson Tuesday by Israel's left-leaning Haaretz newspaper, prompting Abu Rudeina's response.

"The Israeli proposal is not acceptable," Abbas' spokesman said.

"The Palestinian side will only accept a Palestinian state with territorial continuity, with holy Jerusalem as its capital, without settlements, and on the June 4, 1967 boundaries." Abu Rdainah was referring to the borders that existed prior to the 1967 Middle East war in which Israel seized Arab east Jerusalem, Gaza Strip and the West Bank.

He called the Israeli proposal a "waste of time".

Launched in November with the goal of reaching a statehood deal in 2008, the US-sponsored talks have shown little outward sign of progress and have been marred from the start by violence and disputes over Israeli settlement building.

The chances of a peace deal faded further with Olmert's announcement last month that he would step down as prime minister once his centrist Kadima Party chooses a new leader in September.

Olmert spokesman Mark Regev said the prime minister was serious about continuing the peace talks.

But another Israeli official said Olmert was merely trying to establish his legacy. "There is going to be no agreement, period," he said on condition of anonymity.

Truce violation

The Hamas rulers of Gaza on Tuesday lashed out at fighters who fire rockets at Israel from the Palestinian territory in violation of a seven-week-old truce, calling them collaborators.

"About the rocket-firing, I think those who are responsible are those who collaborate with Israel because there is a consensus by all Palestinian groups to respect the truce," said Mahmoud Zahar, the most influential leader of the Islamist Hamas movement in Gaza.

On Monday, a rocket fired from the Gaza Strip slammed into an empty field outside the southern Israeli city of Sderot, causing no casualty or damage.

Zahar told a Gaza radio station that the party which fired the rocket was "linked to Israel as they provide a pretext to exercise pressure on the Palestinian people". After the latest firing, Israel on Tuesday closed the Nahal Oz crossing to Gaza that is used to ferry in fuel and the Sufa passage for food deliveries to the impoverished and blockaded territory.

In all, 40 rockets and mortar rounds have been fired from Gaza since a truce between Hamas and Israel went into effect in and around Gaza on June 19, according to the Israeli army.

Hamas, which seized power in Gaza in June 2007, insists it is respecting the truce and has vowed to crack down on smaller Palestinian resistance movements which still fire at Israel.