GAZA CITY, April 5, 2006 (IslamOnline.net & News Agencies) – The two-state reference by the now ruling Hamas in a letter to UN Secretary General Kofi Annan stirred mixed reactions, as Prime Minister Ismail Haniya said Wednesday, April 5, he would study any offer for political negotiations with Tel Aviv.

"When it comes to political negotiations, that poses a problem because they subscribe to a political vision. We are waiting on what is proposed to us, we will study it and decide on our position," Haniya was quoted as saying by Agence France-Presse (AFP).

Haniya said following the first regular cabinet meeting of his government that he had authorized his cabinet ministers to have "contacts" with Israel in order to ease Palestinian daily life.

"Nothing stops ministers from having contacts with the Israelis to deal with matters connected to daily life, business and the economy," he said.

The first meeting of the Hamas-led cabinet came hours after reactions started to float over references made by Palestinian Foreign Minister Mahmoud Al-Zahar in a letter sent to Annan Tuesday.

A senior Palestinian diplomat at the United Nations said on Tuesday, April 4, that Zahar had made the reference of a "two-state" solution in his letter to Annan this week.

In his letter, copies of which were obtained by AFP, Zahar said the new Hamas-led Palestinian government was looking for freedom and independence side-by-side with its neighbors.

"We look forward to live in peace and security and for our people to live a dignified life in freedom and independence, side by side with our neighbors in this sacred part of the world," said the letter.

The letter's most eye-catching reference was to hope for the realization of a two-state solution, accusing Israel of seeking to annex the occupied Jordan Valley and force the Palestinians out from the area.

"This will ultimately diminish any hopes for the achievement of settlement and peace based on a two-state solution," it said.

Al-Zahar himself denied, however, Wednesday, April 5, he referred to the "two-state solution" in his letter to the UN chief.

"Such a sentence was not used in the letter," Zahar told Reuters.

The Palestinian Foreign Minister also confirmed a letter was sent to Annan but made no mention of the phrase the "two-state solution" nor the term "side-by-side with our neighbors."

Al-Zahar later told the BBC that reference to the two-state solution had been included as a result of a bureaucratic error by a colleague who had sent the letter.

"I asked him please cancel this but they didn't. That's the mistake," he said.

The Palestinian resistance group Hamas has repeatedly rejected calls to recognize Israel, saying talks with Tel Aviv would be a waste of time.

The Israeli government, on its part, has refused any dealings with the new Hamas-led Palestinian government unless the group recognizes it, abides by previous agreements and renounces what it said "violence".

Hours after the new Palestinian government was sworn in March 29, the US ordered its diplomats and contractors to cut off contacts with the new ministers while Canada decided to suspend aid and contacts with the Palestinian Authority.

But Haniya has asserted that his government could establish peace in stages with Israel if the latter withdraws to its 1967 borders and recognizes the inalienable rights of the Palestinians.

Zahar denied he referred to the "two-state solution" in his letter to the UN chief. (Reuters)

Israel, for its part, reacted in cold to the "two-state " overture, accusing Hamas of "playing games".

"In this letter, the Palestinian foreign minister talks about cooperation and peace in the region, but unfortunately he talks of the region without Israel," foreign ministry spokesman Mark Regev told AFP.

Shimon Peres, a leading figure of the ruling Kadima party, said he held out little hope of peace talks with Hamas.

"We are in favor of the roadmap which has been accepted by the whole world, including the Arab countries," he told public radio.

The two-state formula, envisioned in the internationally-endorsed peace plan known as the roadmap, would see the establishment of an independent Palestinian state living in peace beside Israel.

Palestinian and Israeli figures have also reacted in doubt over the overture.

Salah Al-Bardaweil, spokesman of Hamas' bloc in the Palestinian Legislative Council, downplayed reports about the "two-state" reference.

"Our rights can not wash away with the passage of time," he told the Dubai-based Al-Arabiya television.

He also lashed out at foreign calls on the group to recognize Israel.

"How could we recognize Israel, which has no recognized borders?" he questioned.

Ronni Shaked, an Israeli analyst, considered the overture as a Palestinian Public Relations stunt.

"The Palestinians are looking to improve their disastrous image on the international scene…," he said.

Mark Heller, a researcher at the Jaffee Center for Strategic Studies at Tel Aviv University, said what matters for the Palestinian group is to stick to its domestic agenda.

He said that the Palestinian group knows well that neither Arab countries nor Iran can replace the Europeans and Americans as guardians of the purse strings on funds to the Palestinians.

However, other Israeli analysts said the move, if proved true, would be a step forward toward establishing Mideast peace.