Hamas PM unshakable on Israel's recognition

"We will not recognise Israel, we will not recognise Israel, we will not recognise Israel," Haniya thundered over the cheers of tens of thousands of party supporters rallying in support of his embattled Palestinian government.

The prime minister instead repeated that his movement would be willing to enter into a truce with the Jewish state in exchange for a Palestinian state created on land occupied by Israel in the 1967 Middle East war.

"We are for the creation of a Palestinian state on the territories occupied in 1967 with Jerusalem as its capital in exchange for a truce but not recognition of Israel, which would amount to renouncing the land of our ancestors," he added.

Israel rejects any question of a truce and demands that the Palestinian government accept international conditions in order to resume dialogue and end a boycott that has sent the territories into economic freefall.

"It is ridiculous to contemplate a truce with someone who in the same sentence refuses to recognise your existence," said spokesman Avi Pazner.

After Hamas refused to recognise Israel, renounce violence and abide by past peace agreements, the West suspended direct aid when the Islamists took office in March, giving rise to a crisis of unprecedented proportions.

But in a speech summing up his government's record after six months, Haniya rejected "diktats" imposed by the European Union, Russia, United Nations and United States, known as the so-called Middle East quartet.

"We reject foreign interference in the affairs of the Palestinian people and the diktats of the quartet," Haniya said.

"We insist on non-recognition of the legitimacy of occupation and we will never renounce an inch of our land, refugees' return and the creation of a Palestinian state enjoying full sovereignty with Jerusalem as its capital."