Occupied Jerusalem: Tzipi Livni, who hopes to be appointed Israel's prime minister-designate, said on Monday Israel must give up considerable territory in exchange for peace with the Palestinians, drawing a clear distinction with her rival, Benjamin Netanyahu.

She told a convention of the Conference of Presidents of Major American Organisations, "we need to give up parts of the Land of Israel", using a term for areas that include today's Israel, the West Bank and Gaza, repeating her well-known view that pulling out of Palestinian areas would be for the good of Israel, to maintain it as a Jewish state.

Livni told the US Jewish leaders that Israel must take the initiative and come forward with its own peace plan to head off international programmes. "Any plan put on the table will not be in our interest," she said.

She also said she won't take her Kadima party into a coalition led by Likud leader Benjamin Netanyahu without a commitment to promote a peace agreement with the Palestinians.

"Kadima will not join a government under Netanyahu that has an ideology that I am not a partner to," Livni said in an interview on Channel Two television late yesterday. "I have no intention of being a fig leaf for a government of paralysis."

Livni's centrist Kadima Party won one more seat than the hawkish Likud, led by Netanyahu. He opposes large-scale territorial concessions in peace talks with the Palestinians. He believes negotiations should concentrate instead on building up the Palestinian economy

In his address before the gathering, Netanyahu ruled out unilateral pullbacks from territory, criticising Israel's withdrawal from Gaza in 2005, charging that it allowed the group Hamas to take over there.

He said he, too, does not want to govern Palestinians, but Israel must maintain control of all borders, airspace and electronic traffic, indicating that his offer to the Palestinians would be considerably less than a sovereign state.

"Regardless of how the solution is achieved, the Palestinians should run their lives," he said. "They should govern themselves, but they shouldn't have powers that would threaten the state of Israel."

Netanyahu and Livni, the current foreign minister, both claimed victory in last week's election. Each hopes to be picked by President Shimon Peres to form the next government.

Netanyahu appears to have the edge, because a majority of members in the new parliament agree with his views.

Official results of Israel's election are scheduled to be published today, and then Peres will begin formal consultations with the 12 parties in the new parliament.

He is expected to choose a premier-designate within a few days, starting a period of up to six weeks for coalition negotiations.

In an interview broadcast Monday evening on Channel 2 TV, Livni invited Netanyahu to serve in a government she would lead. "I am appealing here to Benjamin Netanyahu to join forces with me in a unity government with a policy that represents the centre of the political map," she said. She has rejected a similar offer from Netanyahu.