JERUSALEM, Dec 28: Israeli Foreign Minister Tzipi Livni is spearheading a new peace initiative between Israel and the Palestinians that seeks to address the most contentious issues such as that of refugees, she said in an interview published on Thursday.

“I am not talking about simply a vision. I am talking about a detailed operative plan. I will not reveal now all of its details, but I can tell you that as far as I'm concerned I know exactly what has to be done,” she told the liberal Haaretz's weekend magazine.

“The vision is a state of Israel as national home for the Jewish people... and on its side a Palestinian state which is the Palestinians' national home which offers a complete solution to the problem of the Palestinian people and the Palestinian refugees,” she said.

“It is my moral obligation to make it happen,” the 48-year-old minister said. “My vision says that the two nation-state principle is not only an Israeli gift to the Palestinians but advances Israeli interests.”

However, an official in Prime Minister Ehud Olmert's office denied the existence of any new peace plan.

“Even Livni herself doesn't know she has a new plan,” the official said.

The Palestinian side also denied that a new initiative was under way.

Yasser Abed Rabbo, a member of the PLO executive committee with whom according to Israeli press reports Livni has met as part of her initiative, denied that a new plan had been presented.

“Until now, we have not received a single serious Israeli proposition,” he told AFP.

Peace talks between Israel and the Palestinians have made next to no progress for six years, but hopes have been revived in recent months, mostly following Olmert's meeting with Palestinian President Mahmud Abbas in Jerusalem last week.

Ms Livni offered only broad outlines of her initiative.

When asked whether Israel's controversial security barrier in the West Bank would be “the reference border for dividing the land” in a future solution, she said ‘yes’.

A large part of the security barrier snaking throughout the occupied West Bank lies on the Palestinian side of the so-called Green Line -- Israel's borders prior to the 1967 Six Day War.

Palestinians want a full Israeli withdrawal from territory occupied during that war in a final negotiated deal.

“We won't accept this as either temporary or final borders,” Mr Rabbo said, referring to the barrier.

Ms Livni also hinted that in contrast with previous Israeli declarations that there would be no negotiations as long as Palestinians continue attacks, she was ready to hold negotiations under fire.

“Already under (Ariel) Sharon's government, I claimed we should not say we would not talk under fire, but that we will not make concessions under fire.”

Ms Livni's comments come after Abbas this week called for intensive talks -- away from the media glare -- between Israelis and Palestinians ahead of a visit to the region by US Secretary of State Condoleezza Rice next month.

“We have proposed the idea of back channel talks with Israel and with the participation of members of the quartet... with the aim of discussing the final phase,” Mr Abbas told reporters.

The so-called quartet of regional diplomatic players includes the United Nations, the European Union, Russia and the United States.

“The arrival of Condoleezza Rice would be the appropriate time to talk about this issue in a serious manner,” he said.

A spokesman for the radical Hamas party which heads the Palestinian government rejected Ms Livni's proposed solution which “does not take into account the rights of the Palestinian people.”

“The solution is an independent state on the 1967 borders with Jerusalem as capital, the return of refugees and the release of prisoners in exchange for a long-term truce with Israel,” Fawzi Barhum said.—AFP