Sinn Fein leader Gerry Adams on Wednesday slammed Israeli legislation that makes it difficult for Palestinians married to Israeli Arabs to gain legal status in Israel as a "terrible thing."

Speaking during a meeting with the deputy Knesset speaker, MK Ahmed Tibi, at his East Jerusalem hotel, Adams also called criticized the law that restricts Palestinian appeals for compensation for damage resulting from military operations.

Adams arrived Tuesday night for a visit to the Palestinian territories, following an invitation from Palestinian Authority Chairman Mahmoud Abbas. He is expected to meet Wednesday with Palestinian Prime Minister Ismail Haniyeh, of Hamas.

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Israel had rejected Adams' request to meet with Prime Minister Ehud Olmert or Foreign Minister Tzipi Livni. Government sources told Haaretz on Wednesday that the Sinn Fein had been informed of this decision in advance.

Adams on Tuesday called on Israel to hold a direct dialogue with Hamas, saying that the international and Israeli embargos on the Hamas government only inflames tensions in the region.

He called for Israel and Hamas start talking in order to reach a peaceful solution to the conflict. He also expressed his opposition to preconditions for Hamas, such as the recognition of Israel, which he said could come as the result of dialogue between the two sides.