Israeli lawmaker floats idea of talks with Hamas

JERUSALEM (Reuters) - A senior opposition leader in Israel unveiled a peace plan Sunday that held out the possibility of negotiations with Hamas, the Palestinian Islamist group in control of the Gaza Strip.

Shaul Mofaz, a former defense chief who is now number two in the centrist Kadima party, raised the prospect of talks with Hamas -- an idea rejected by both Israel and Hamas for years -- to restart the long-stalled peace process with the Palestinians.

Israel and Western powers have said in the past they would engage Hamas if it agreed to recognize Israel, renounce violence and accept interim peace deals, terms Hamas refuses to accept.

While still saying that Hamas must accept the West's demands, Mofaz said that if it won Palestinian elections in January, "I think that Israel must sit with a group that changes its agenda and the way it conducts business."

His call dominated Israeli headlines and talkshows on Sunday. It came three days after Western-backed Palestinian President Mahmoud Abbas announced he would not seek a second term in the January 24 election, citing the political stalemate with Israel and further clouding peace prospects.

Mofaz said Israel should agree to Palestinian statehood on some 60 percent of occupied West Bank land, and Jewish settlers living in these areas should be offered compensation for removal.

Hamas rejected Mofaz's plan, calling it an attempt to capitalize on its bitter rift with Abbas' Fatah faction.

Israel tightened its blockade on the Gaza Strip after the Iranian-backed Hamas routed forces loyal to Abbas and seized control of the coastal territory in 2007. Israel conducted a devastating offensive against Gaza in December last year and January this year with the stated aim of halting Palestinian rocket fire from the territory.

Some analysts said Mofaz's plan could be part of a political move to take over as head of Kadima, the former ruling party ousted when Benjamin Netanyahu secured a right-wing majority in a February election.

Mofaz lost a party election last year to Tzipi Livni, former foreign minister and head negotiator with the Palestinians.

(Additional reporting by Nidal al-Mughrabi in Gaza)