In an interview released yesterday, Palestinian Authority Prime Minister Salam Fayyad, called for a united Palestinian government that includes Fatah and Hamas, and would continue the peace process with Israel. The following are key excerpts:

On Palestinian reconciliation,

It is very difficult for me to see how our dreams can be realized in terms of getting to the point where we can enjoy that which is an absolute right for people all over the world: to live as free people in a country of our own, that's Palestine. In fact, with Gaza continuing to be the way it is, and viewed as a different Palestinian entity, I think the biggest risk that entails in my view politically, and given our national aspirations, is that the entire Palestinian cause, after decades of struggle to get to the point of freedom, would be put unfortunately on the path of liquidation.

He also pointed at settlement expansion as a hindrance,

settlement activity, expansion, confiscation of land and what have you - activity totally inconsistent with the prospect of an emergence of an independent, viable Palestinian state of which the West Bank including East Jerusalem would form an integral component, that prospect diminished even more. That situation is clearly not sustainable from our point of view.

On dealing with Hamas,

Hamas is a faction with a program with which I do not agree. . . . This is not unusual. Parties all over the world have their platforms that not everybody agrees with. But that is something that I view as a political phenomenon. It has to be dealt with politically. In the course of a political process that is allowed to run its course, people choose this party, that party, a combination of parties to govern, and that's up to the people. To think that one is going to deal with a party with whose platform one does not agree by just doing away with that party is not thinking about things right. We are in the realm of politics. Parties with different and competing ideologies coexist and form coalition governments - that is what happens in many parliamentary democracies in the world, including by the way, in Israel.

You have a faction with popular support - because Hamas did win the elections, there is no question about that, in January 2006 - that did not agree with those commitments, obligations and agreements that produced the Palestinian Authority to begin with. This is a major contradiction. Nevertheless, as I said, [a way] has to be found and can be found to reconcile these two issues. I gave you an example of how that can be done, of an agreement amongst the factions on a government that is non-factional, a government whose platform is shielded from the platforms of the individual parties that make it up, or that back it.

On continuing the peace process,

We remain firmly committed to all the obligations we have entered into. Our vision is one of peaceful coexistence and pursuing that as a path to the ultimate goal of freedom and statehood. We are saddled with these difficulties of having these vast and sharp differences in political views, but I do not know if there are two Palestinians who disagree on the need to end the occupation to have statehood.

What is the ultimate deliverable goal of the peace process? Emergence of an independent, viable Palestinian state on the territories occupied by the 1967 war, clearly, living side by side in a state of security and harmony with its neighbors, including Israel. That's the goal of the peace process to which we have committed ourselves.

Now, between now and then, you have a faction like Hamas that says, "No, I do not recognize that it is." That represents the problems and complications. Unfortunately, given the situation we are in, the choices we have to make are choices between bad and worse, and not between good and bad. The case between doing it this way or that way, or that we cannot move and stop everything until we can stop all of these conflicts.

Therefore, rather than saying, stop everything, which basically makes the process itself hostage to an outcome that was produced democratically, I think what is best is to resort to a political process that leaves out resolving these differences over time and in the interim finds solutions to these problems. But it would be a huge mistake to just basically stop everything until there is a different outcome. Because stopping everything until there is a different outcome may even lead to reinforcing the status quo, which is not something anybody wants.

On uniting to rebuild Gaza:

Imagine a situation with somebody sitting on probably what used to be their home now. They are not going to be amused by debates as to who is going to be able to do what and whose responsibility it is. They want to have a roof over the heads of their children. That's what they are looking for...Take housing, as an example. Four thousand houses were destroyed in Gaza, rendering homeless 23,500 people. Eleven thousand housing units were at least partially damaged, affecting very adversely 78,000 of our people there. That's a key priority of the reconstruction program. How are we going to do this under the conditions of apartness? We have to think fast. We have this conference coming up on the 2nd of March in Egypt to raise the funds necessary to rebuild. What we thought we should do is find a way to get the assistance directly to the beneficiaries. The minute you start to think this way, you think in terms of banks. There are banks that are operational in Gaza. The Palestinian banking system is still fully integrated and consolidated. So we start a bit of discussion, small circles to reconsult on a scheme to do this and to have the right parameters attached to it and then we brought in this other group of consultants about 10 days ago.