Chief Palestinian negotiator Saeb Erekat said that the Palestinian Authority’s peace plan covers all the core issues of the Israeli-Palestinian conflict.

Erekat told Israel’s Army Radio that the proposal is the best to date and includes issues such as borders, Jerusalem, refugees, water and security. "We presented the proposal to (US Middle East envoy) George Mitchell over two months ago. We gave him maps and papers that clearly state our positions on all the final-status issues so that he would offer it to (Israeli Prime Minister Benjamin) Netanyahu. However we still haven't received any answer."

"I hope that Netanyahu will be a partner in peace so that we can reach a solution involving two states for two nations," Erekat added.

He denied that US President Barack Obama has told Palestinian President Mahmoud Abbas that relations between the US and Palestinians will be affected if the latter refuse to engage in direct talks with Israel. "The letter did not contain threats, he requested that we enter into direct talks and stand shoulder to shoulder so that we can reach a two state solution," Erekat said, referring to a letter Obama sent Abbas.

According to Erekat, "Obama explained that his role would be less if we don't take his recommendation to start direct talks." He stressed that the Palestinian Authority (PA) is still in daily contact with the US administration.

Senior Palestine Liberation Organization (PLO) official Hanan Ashrawi also denied the report that was carried by Israeli daily Haaretz. In its report, Haaretz quoted Ashrawi as saying in an interview with the London-based Al-Quds Al-Arabi newspaper that the United States threatened to break off ties with Abbas and the Palestinian Authority unless the Palestinian president agreed to return to face-to-face peace negotiations with Israel.

She said the Obama administration had ramped up pressure on PA to move from American-mediated talks to direct negotiations with Netanyahu.

"There has been huge pressure on the Palestinian Authority to move to direct talks," Ashrawi reportedly said. "They even threatened to isolate the Palestinians and cut off relations," she was quoted as saying.

Netanyahu announced at a ministerial meeting Sunday that direct negotiations with the Palestinians will begin by the middle of August.

"In recent weeks I have held talks with foreign leaders, which have reached one goal: A more convenient environment for launching direct talks with the Palestinians," Netanyahu said.

"I call on Abu Mazen (Abbas) to launch peace talks and accept the international community's call, while maintaining security arrangements as a basic condition," he added.