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Palestinians will not be pushed into accepting the "Mickey Mouse" state which Israel has in mind for them as part of a peace deal, Prime Minister Salam Fayyad warned on Wednesday.

If such a state is what Israeli Prime Minister Benjamin Netanyahu foresees, then the Middle East peace process will remain suspended, he told a news conference.

"By all indications they have a Mickey Mouse state in mind," Fayyad said, using the Disney character''s name as slang for unimportant or trivial. "It looks like it would not come close to what we have in mind."

Palestinians have not lost faith in the mediation of US President Barack Obama, the prime minister said in response to questions about reports that they are deeply disappointed.

But Israel''s leaders "should be asked" a fundamental question about exactly what kind of state they are ready to agree to before Palestinians are pressed to relaunch talks, he stressed.

Palestinians must know "what are we getting into here" Fayyad said. They should reject a peace process conducted merely "for the sake of it".

Obama began his mediation campaign in January insisting that Israel freeze all settlement building in the occupied West Bank but has retreated in the face of Netanyahu''s resistance and now urges the Jewish state to "restrain" settlement building.

Two-state solution

Netanyahu took office in March proposing to help the Palestinian economy develop but refusing to commit his government to the "two-state solution" that previous Israeli governments had signed up to.

Under pressure from Washington, he made a speech on 14th June finally endorsing that goal, but only if the Palestinians recognised Israel as a Jewish state and accepted a state of their own with significantly limited sovereignty.

There was no shift in that position when Netanyahu met Palestinian President Mahmoud Abbas in New York last month at the urging of Obama. Many Palestinians felt Abbas was humiliated when Obama dropped his demand for a settlement freeze.

Obama''s peace envoy George Mitchell has made nine shuttle trips to the region with no sign of breaking the impasse.

Fayyad said there was wide agreement that Israel has not met commitments it made in the 1993 Oslo peace plan, "yet there is an expectation that the peace process should restart anyway".

"We are told something is better than nothing."

But the Palestinians were not about to open talks with Netanyahu on the basis of "let''s give it a shot", he said.

He said he was troubled by recent suggestions that Netanyahu may seek to keep for Israel large areas of the West Bank where it currently has full control, and in the Jordan Valley, where 8,000 Israeli settlers operate large argi-business companies.

If this is the case, "then I''d say forget it" he said. "These questions should be asked."

International powers led by the United States must insist that Netanyahu fulfil commitments and cease the "blatant violation of international law" perpetrated daily by the settlement of occupied land, he added.

The conflict cannot be resolved "without active international involvement led by United States," Fayyad said. "This is not about politics this is about physics. Israel is in control."