Prime Minister Ehud Olmert on Monday said that only people suffering from delusions believe it is possible to realize the dream of holding onto the greater Land of Israel, territories Israel captured in the 1967 Six Day War.

Olmert's comments came amid negotiations with the Palestinian Authority and indirect Israeli peace talks with Syria.

Palestinian officials said the negotiations over reaching a final status deal involved an Israeli offer of 91.5 percent of West Bank. He made the remarks speaking at a Knesset Foreign Affairs Committee meeting.

In response, MK Limor Livnat (Likud) charged that what was actually delusional was that a prime minister at the end of his political career can receive envelops of cash and hold talks on the return of the Golan Heights.

The former cabinet minister was referring to the ongoing corruption investigation against Olmert in which he is suspected of receiving illicit funds from an American businessman over a number of years.

Later on in the committee session, Olmert denied holding talks with Hamas despite Vice Premier Haim Ramon's claim of the opposite last week.

Olmert also stated that the notion of Israel becoming a state "of all its citizens" was gaining credit within elites in the United States. He was speaking of what would be, in effect, a one-state solution whereby Palestinians receive Israeli citizenship.

"This is a very dangerous process that endangers the continuation of our existence as a Jewish state," Olmert told the committee members. He warned that if Israel does not reach an agreement with the Palestinian Authority it will eventually face a Hamas leadership in the West Bank, as opposed to the more moderate Fatah faction.

In reference to talks with Damascus, Olmert said he has made no promises to Syria about a future peace agreement. He told the committee that he has made no commitments to Syria. However, he said it's clear what Syria wants as part of any peace deal.