The Palestinian Authority on Monday rejected statements Prime Minister Benjamin Netanyahu made at a parliament session, which he described as pre-conditions for peace.

Netanyahu said that the Palestinians have to recognize Israel as a Jewish state, solve the refugee problem outside Israel and accept a permanent Israeli army presence in a demilitarized Palestinian state in parts of the West Bank that does not include Jerusalem.

He also said that that Israel would be prepared to compromise and "cede parts of our homeland" for true peace with the Palestinians, but added that he did not believe the latter was ready to be a true partner for peace.

Netanyahu's statements "are unacceptable pre-conditions," said presidential spokesman Nabil Abu Rdeineh.

"Any peace deal means that East Jerusalem will be the capital of the state of Palestine and all permanent status issues should be resolved at the negotiations table according to international resolutions and the road map," he said.

Abu Rudeineh criticized Netanyahu's statements saying, "they once again show that Israel is not interested in peace and defies the will of the international community, but that will not stop the Palestinian people from asking for their full rights, including going to the United Nations."

The Palestinians plan to ask the UN Security Council and General Assembly in September to recognize a Palestinian state on the 1967 borders with East Jerusalem as its capital.

Also Monday, Chief Palestinian negotiator Saeb Erekat told a Geneva Initiative conference in Tel Aviv that there could be a peace agreement within days, but that no Israeli official seemed willing to make that decision.

Israel and Palestinians need to make decisions, not start from scratch with negotiations, Erekat said. He also warned that the Palestinians would turn to the UN for recognition of statehood if the peace process did not resume.

Peace must not be looked at as a favor from the Palestinians to the Israeli or vice versa, said Erekat, but rather as a mutual interest.

Commenting on Netanyahu's speech, Erekat said the Israeli leader had chosen "dictation, not negotiation" and was "solely responsible for the derailment of the peace process".