President Shimon Peres said on Thursday that Israel and the Palestinians should agree on a Palestinian state with temporary borders as a first step towards ending the Middle East conflict, as Prime Minister Benjamin Netanyahu is due to outline his government’s policies on the peace process at a speech on Sunday.

"The roadmap outlines a clear path and (the sides) should implement the second stage of the roadmap — declaring a Palestinian state with temporary borders," Peres’s office quoted him as saying.

Israel and the Palestinians should further make "a clear commitment that the borders will become permanent within a limited period," he said at a meeting with the European Union foreign policy chief Javier Solana.

The Palestinian Authority flatly rejected the Israeli president’s proposal.

"We categorically reject Peres’s proposal which takes us back to square one," President Mahmoud Abbas’s spokesman Nabil Abu Rudeina told AFP.

The roadmap drafted in 2003 by the United States, the European Union, Russia and the United Nations outlines steps toward establishing a viable Palestinian state living in peace alongside Israel.

To date, Netanyahu has not endorsed the concept of a Palestinian state and has defied U.S. pressure to freeze construction activity in West Bank settlements that are home to more than 280,000 Israelis.

The heat is on the prime minister from within his own party to resist U.S. pressure and not utter the words "Palestinian state" in Sunday’s policy speech.

"The expression Palestinian state should not be used," Likud MP Miri Regev said on Thursday, echoing the sentiment of several other members of Netanyahu’s right-wing Likud party.

Netanyahu hopes, however, that his landmark speech will help ease the mounting tension in relations with the United States, Israel’s prime ally.

But he faces a delicate balancing act if he is to avoid infuriating his partners in the governing center-right coalition, which is divided between those who reject a two-state solution, and those, like Defense Minister and Labour Chief Ehud Barak, who support it.

Regev insisted that U.S. President Barack Obama cannot force decisions upon the Israeli government.

Unsatisfying

According to the Haaretz newspaper, Netanyahu will announce his government’s adoption of the roadmap and the two-state solution while rejecting a settlement freeze and insisting Palestinians recognize Israel as a Jewish state.

But western diplomats said this would not satisfy Washington.

They said that the U.S. doubts Netanyahu’s awaited speech will satisfy Obama’s peacemaking demands.

Briefing their counterparts in the Quartet of Middle East mediators after talks with Netanyahu, U.S. officials voiced skepticism he would make the clear, far-reaching and tangible commitments on settlements or statehood that Obama has sought, participants said on condition of anonymity.

"The Americans are not satisfied with what they have been told," a senior Western diplomat said.

Israeli officials said Netanyahu had not finalized his speech but it would focus on the road map, which envisages creation of a Palestinian state alongside Israel. They said he would urge Arab countries to talk peace with Israel.

A senior Western diplomat said Netanyahu was likely to stop short of backing the creation of a state and promise instead to work towards a vague goal of Palestinian self-government.

To sidestep the issue, Netanyahu could implicitly accept a two-state solution by stressing his government’s acceptance of the road map as part of its pledge to honor diplomatic agreements signed by previous Israeli administrations.

(Alarabiya.net English and Agencies)