TEL AVIV, Jan 5: Israeli Prime Minister Ariel Sharon said on Monday that he supported the creation of a Palestinian state that would require the dismantling of a number of Jewish settlements in the occupied territories.

"If the Palestinian Authority proceeds with democratic reforms and puts an end to terrorism and incitement to violence, the state of Israel will meet its obligations and allow the creation of a Palestinian state," Sharon told his right-wing Likud party's annual convention.

Sharon said that the Palestinian state would be established "first long temporary border and then on permanent borders which means we will have to give up some of the settlements."

Mr Sharon said Israel would undertake unilateral moves to separate "physically and diplomatically" from the Palestinians if it became clear it did not have a partner for peace, adds dpa

Addressing the Central Committee of his Likud Party, the premier said in the absence of any Palestinian partner, his disengagement plan was best from a security standpoint. However, he noted that an agreement would be better than a unilateral move, "better for us and better for the Palestinians", who in such a case would receive far less than they could receive via a peace deal.

He said - to jeers from some of the audience - that "it is clear that in any permanent agreement we will have to give up some of the Jewish settlements (in the West Bank and Gaza Strip)".

Sharon began his speech by saying Israel would implement the international "road map" peace plan. "The road map is the only diplomatic plan which can bring peace, since its first step is an end to terrorism and the root dismantling of (the terrorist) infrastructure," he said.

He repeated this theme, saying that if "the terrorist infrastructure was dismantled, weapons were collected and a new Palestinian Authority was established, democratic and free from terrorism", then the Israeli government was ready to carry out its part (of the road map) and "allow the establishment of an independent Palestinian state, first with temporary borders and then with permanent ones. But, he stressed, Israel would not negotiate under fire. "If we get security, Israel will give much, very much," he said. However, he warned that if within several months Israel believed it had no partner "then we will act alone, with maximum coordination with our allies, including the United States, in order to bring maximum security to Israeli residents."

He said that in such a case, several settlements would be moved, "in order that we can limit friction and better protect our soldiers, settlers and inhabitants of Jerusalem and central Israel".-AFP/dpa