Palestinian Prime Minister Salam Fayad said Sunday that Israel's removal of roadblocks and the transfer of funds to the PA would not achieve their goal unless there are simultaneous negotiations over a permanent solution to end the occupation.

Fayad, who also serves as finance minister, was speaking to Haaretz in his first interview to the Israeli press since his appointment as head of the Palestinian emergency government.

The interview was given on the eve of a meeting between Prime Minister Ehud Olmert and Palestinian Authority Chairman Mahmoud Abbas at Olmert's bureau in Jerusalem.

The prime minister told Haaretz that Israel needn't be concerned over the right of return issue. According to Fayad, the Palestinian Liberation Organization (PLO), which represents the Palestinians in the political process, has adopted the Arab peace initiative, which calls for a just and agreeable solution to the Palestinian refugee problem. He emphasized that the solution must be agreed upon with Israel.

Fayad added that though he places much importance on gestures offered by Israel, including the removal of roadblocks, the transfer of previously withheld funds and the release of prisoners, it would be a grave mistake, even "pathological," to focus the Israeli-Palestinian agenda on these gestures. He stressed that talks between the two countries must focus both on the short and long term aspects of the peace process in order to restore both the Israeli public's and the Palestinian public's faith in the process.

Fayad also criticized Israel's "no partner" unilateral approach during the 2005 disengagement from Gaza. He said that the one-sided process pushed the Palestinians "into a corner."

In response to Israeli claims that Abbas' government is too weak to serve as a substantial partner for peace, Fayad replied that if Israel wants to wait until the Palestinian Authority becomes a major world power before conducting talks, the wait would take forever. However, he lay part of the blame for the failure of the peace process on the Palestinian people, saying that they must do more to battle corruption, enforce the law, and ensure the effectiveness of the new Palestinian government.

The prime minister rejected the option of cutting Gaza off from the West Bank, saying that it was an inseparable part of the Palestinian state. When asked about establishing a federation state between Jordan and the West Bank, Fayad said that such arrangements could be discussed only after the end of the Israeli occupation and the establishment of an independent Palestinian state.

In the interview, Fayad said that since Hamas had made hostages out of Gaza residents in their violent takeover of the strip, it was unjust to punish these residents with a financial siege, aimed at weakening Hamas. He called upon Israel to open its border crossings with Gaza, closed since the Gaza takeover, and allow the free flow of supplies and goods to and from the coastal territory.

The Palestinian prime minister also had harsh criticism for the international militant organization al-Qaida. He criticized the group's leaders for speaking on the behalf of the Palestinian people unsolicited and added that no group has done more damage to the Palestinian cause than radical Islamic organizations such as al-Qaida.