Ramallah - Palestinian Authority Prime Minister Salam Fayyad said Monday that the fundamentals of a viable Palestinian state will be in place within two years at the longest.

Speaking in Abu Dis, in the West Bank, Fayyad called on all Palestinian groups, particularly the Islamist Hamas movement, as well as the international community to adopt a two-year time frame for an independent state.

"Achieving the goal of establishing the Palestinian state within a maximum of two years is possible," said Fayyad, who spoke at al-Quds University in the town of Dis, just behind the 8-metre concrete wall Israel built to separate East Jerusalem from its West Bank environs.

"This is the state we seek, and not just divided cantons," he said.

Fayyad was referring to his Israeli counterpart Benjamin Netanyahu's June 14 speech The Israeli leader declared that history had shown that closing down settlements in the Palestinian territory would not advance peace. He said Israel would allow its remaining West Bank settlements to expand to accommodate natural growth.

Fayyad insisted that such a settlement policy would derail peace efforts and end the Palestinian dream of their own state on West Bank territory. Palestinian governance is now split between the West Bank, with its more moderate and peace-seeking Fatah government, and Gaza, governed by the radical Hamas movement.

"The Palestinian Authority stresses the position that Israel should be made to abide by the political agenda and its obligations, which should lead to an end to the occupation. This is our position and we will not go back on it," he said.

The peace process would lack all credibility unless Israel "abides by its obligations," Fayyad said. Those obligations include ending the settlements, ending the siege, particularly on the Gaza Strip, and ending the incursions into the West Bank cities, he said.

Fayyad said the Palestinians made "a painful concession in 1988 when they accepted a state on only 22 per cent of the land of historic Palestine."

"There will not be a lasting solution unless Israel realizes this fact and unless the final settlement is based on international resolutions," Fayyad declared.

Turning his attention to the Israeli public, Fayyad said that Palestinians have their own historical story, just like Israel does, even if the two stories are different.

Palestinians "want only to have what is considered a natural right to the people (around) the world and that is to live in freedom and dignity in our homeland."

"We look forward to building our state next to your state on the basis of good neighbourly relations. We do not want to build walls. We want to build bridges. This land is our land and this homeland is our homeland and we do not have any other homeland."(dpa)