Palestinian PM sees no '08 Israel accord

By Ed Stoddard

In an interview with Reuters in the Texas capital, Austin, where he is on a private visit, he highlighted the lack of progress on the issue of Israeli settlements and military incursions into the West Bank as among the chief obstacles in the "road map" to peace and Palestinian statehood.

On a trip to the Middle East last month, U.S. President George W. Bush said he believed a peace treaty between Israel and the Palestinians would be signed before he leaves office in January 2009.

In the interview, Fayyad said: "The short-term track is not moving as well as it needs to for the political process, for negotiations. In particular, the lack of an adequately firm commitment with regard to (Israeli) settlements," he said.

Israeli officials have said Palestinians have a long way to go to meet their security obligations under the road map.

"Our efforts are undermined, our credibility is undermined particularly in areas where we have made progress," he said.

Israel fears any West Bank areas it hands over to the Palestinians could, like the Hamas-controlled Gaza Strip, be used by militants as launching points for rocket attacks on Israeli towns.

Fayyad said militias linked to the militant Palestinian group Hamas and others were also not helping matters for his embattled government.

(Editing by Peter Cooney)