Palestinian Authority President Mahmoud Abbas quickly dismissed a top aide's call Wednesday for a unilateral declaration of statehood if negotiations with Israel fail.

The Palestinians are committed to reaching a negotiated peace agreement this year, Abbas said in a statement.

"If we are unable to do that... We will return to our Arab [brothers] to take the appropriate decision," he said.

Earlier in the day, Abbas's aide, Yasser Abed-Rabbo, said he wanted to follow in the footsteps of Kosovo, which on Sunday declared independence from Serbia.

The first option was successful negotiations, Abed-Rabbo told a number of media outlets, but if this failed, a unilateral declaration was one alternative.

"If this doesn't happen, we have another option," he said in an interview. "Kosovo is not better than Palestine. If the whole world, the United States, the European Union, the majority of its states, have embraced the independence of Kosovo, why shouldn't this happen with Palestine as well?"

The current peace efforts "are going nowhere," and the Palestinian leadership was discussing the proposal to unilaterally declare statehood, Abed-Rabbo said.

Senior officials told The Jerusalem Post on Wednesday that the idea had not been mentioned during talks in Jerusalem on Tuesday night between Olmert and Abbas.

"We don't think this idea is being seriously considered," one official said. "Everyone - Israel and the Palestinian leadership - is working toward a negotiated settlement."

This is not the first time the issue of unilateral independence has been broached. The Palestinians declared independence in 1988, but the international community did not recognize the declaration. Then, however, there was no territory under Palestinian control.

Chief Palestinian negotiator and former PA prime minister Ahmed Qurei said a unilateral declaration of statehood had never been discussed by the Palestinian leadership.

"Decisions should be taken and then declared, and not be declared and then be taken," Qurei said.

He stressed that the negotiations with Israel were serious and were touching on all major issues, but he concurred with Abed-Rabbo that no progress had been made so far.

US State Department spokesman Sean McCormack said that unlike Kosovo, the Palestinians were still involved in peace negotiations. "We believe that there is hope in that process. It has not run its course," he said.

Israeli officials rejected out of hand any idea of a unilateral declaration of statehood by the Palestinians.

Meanwhile Wednesday, the Associated Press reported that settlers had illegally placed 27 mobile homes in the Eli settlement in the last month.

The move came just as Palestinian negotiator Saeb Erekat told a news conference that Abbas and Olmert had agreed on Tuesday to work with James Jones, a US mediator in charge of investigating complaints about noncompliance with the road map peace plan.

Under the road map, Israel must halt all settlement activity. Palestinians have long argued that continued construction is one of the key stumbling blocks to the creation of a Palestinian state and is undermining the talks.

But in Eli, the settlement director, Dovi Odeser, insisted the new homes, funded by private Israeli and foreign investors, were being built within an existing neighborhood under an approved zoning plan.

"We did not deviate in any way," Odeser said.

However, Capt. Zidki Maman, spokesman for the Civil Administration of Judea and Samaria, said that was not true.

"There's no zoning plan there. There's no building permit," he said.

The Defense Ministry, which oversees all settlement activity, is aware of the illegal construction and "is working on it," he said. "In the end, all illegal building is taken care of."

He declined to say whether the trailers would be dismantled. "I don't want to predict how it will end," he said.

In Eli, buckets of paint and piles of drywall, ceramic tiles and cinderblocks, protected by blue plastic sheeting, were stacked up on the dirt road, as workers toiled to get the trailers ready for people to move in.

Last week, The Associated Press reported similar unauthorized construction activity in Maskiot in the northern Jordan Valley. The military has issued orders to raze seven homes that were built illegally, Maman said. He had no information on when the demolition might be carried out.

Asked about the construction in Eli, Olmert spokesman Mark Regev said the government "is committed to its obligations on the issue of settlement."

"There will be no new settlement construction, and there will be no outward expansion of existing settlements," Regev said. He did not say what action, if any, would be taken in Eli.