WASHINGTON, May 24: Encouraged by a positive US response to his plan to redraw the map of the proposed Palestinian state, Israeli Prime Minister Ehud Olmert told Congress on Wednesday that he would implement his proposal if Hamas continued to refuse to recognise Israel.

But Mr Olmert’s address to both chambers of Congress focused on Iran’s nuclear programme which, he said, threatened the very existence of the Jewish state.

“This challenge, which I believe is the test of our time, is one the West cannot afford to fail,” he said, estimating that Iran “stands on the verge of acquiring nuclear weapons.”

Prime Minister Olmert, on his first US visit since taking office after Ariel Sharon’s incapacitating stroke in January, met President George Bush and Defence Secretary Donald Rumsfeld on Tuesday and urged them to support his policy of creating ‘final borders’ for Israel. This policy calls for evacuating Jewish settlers from sparsely populated areas in the Palestinian territory to larger Jewish settlements within the areas seen as part of a future state of Palestine.

Until recently, the US administration had not approved Mr Olmert’s plan to create new Jewish residential areas for 200,000 people around Jerusalem, otherwise known as E1.

In his meeting with President Bush, Mr Olmert made it clear that he would proceed with his own plans for charting Israel’s borders in the next ‘two to three years’ if the Hamas-led Palestinian government refuses to acknowledge Israel’s right to exist. And Mr Bush’s support should strengthen his hand, he said.

Responding to Mr Olmert’s overtures, President Bush praised his plans as ‘bold ideas, which could help achieve peace’. “The prime minister’s ideas could be an important step toward the peace we both support,” the US president said in a public appearance in the East Room of the White House.

Mr Bush, however, insisted that he had not abandoned the roadmap for peace that he has been supporting for four years. “Our preferred option is for there to be a negotiated settlement.”

Mr Olmert pledged to pursue negotiations with Palestinian President Mahmud Abbas, but noted that Mr Abbas’ options were limited by a parliament now controlled by Hamas, an organisation labelled as terrorist by the US.

“I intend to exhaust every possibility,” Mr Olmert said. “However, we will not enter into any kind of partnership with a party which refuses to recognise our right to live in peace and security. . . . If we come to the conclusion that no progress is possible, we will be compelled to try a different route.”