Opposition leader Benjamin Netanyahu's office said Tuesday the Likud chairman will halt peace talks with the Palestinians in their current form if he wins a national election next February, but will instead step up efforts to develop the Palestinian economy.

Spokeswoman Dina Libster said the Israeli politician, a strong contender to be the next prime minister, believes the talks launched by President Bush in Annapolis, Maryland, last year have failed.

"He thinks the Annapolis process and negotiations taking place now are mistaken," Libster said.

The Annapolis talks aim to resolve all key areas of dispute with the Palestinians, including the conflicting claims to Jerusalem.

"Netanyahu does not want to halt talks, but he believes it's premature to talk about a final peace deal, and sharing control of Jerusalem is out of the question," Libster said.

Instead, he thinks talks with the Palestinians should focus on developing their economy, with political matters to be discussed only after economic conditions on the ground improve. "Economic peace has to come first," she said.

Netanyahu's positions appear to be in sharp contrast to the will of the international community and the Palestinians, who have said they object to any more interim agreements with Israel.

The Palestinians seek an independent state that includes the West Bank and east Jerusalem - territories captured by Israel in the 1967 Six-Day War.

On Sunday, the outgoing Israeli government, the Palestinians and international mediators all said the Annapolis process should continue after Bush leaves office in January.

Netanyahu appeared to express some willingness to continue the Annapolis process earlier this week after a meeting with international envoy Tony Blair. "We will move both the political negotiations forward and the economic peace that we've been working on," Netanyahu said.

But Libster said he had not changed his position opposing the talks.

Opinion polls show Netanyahu, who leads the hawkish Likud Party, and chief Israeli negotiator Tzipi Livni in a tight race ahead of the Feb. 10 vote. But the polls indicate that Netanyahu would be in a stronger position to form a coalition government because of strong support from smaller, hawkish parties.

Chief Palestinian negotiator Ahmed Qureia said the Palestinians will negotiate with whoever leads the Israeli government, but that talks must produce results.

"We want to see if he wins and to see his program and then decide," Qureia said.