Palestinian caretaker Prime Minister Salam Fayyad defended his plan for a de facto independent Palestinian state against Israeli criticism on Sunday night.

"Establishing the state and its institutions is a Palestinian responsibility," Fayyad said in a joint press conference with European Union foreign policy chief Javier Solana. "We are interested in this project and we are working towards implementing it," he added.

Earlier Israeli Foreign Minister Avigdor Lieberman criticized the Fayyad plan.

"Palestinians' unilateral initiatives do not contribute to a positive dialogue between the parties," said Lieberman, who threatened that Israel could respond with some unilateral initiatives of its own.

"If the Palestinians do indeed adopt the unilateral program proposed by Salam Fayyad, it will not go unanswered," the Israeli official warned.

Responding to Lieberman, Fayyad said that "if this was a unilateral act, then it is a positive unilateral act, which aims at ending the occupation."

Speaking after a meeting with Fayyad, Solana said Europe supports the plan. "We support the Fayyad plan,” he said according to DPA, “It is very good and it shows the fact that the Palestinian government is functioning.”

Fayyad’s plan focuses on building up infrastructure and improving the economy. Among other things the program calls for the construction of an airport in the West Bank and rail links with neighboring countries.