"I think such an agreement is impossible under the current circumstances. We must go for a long-term intermediate agreement," he told a conference of Foreign Ministry diplomats. "If we were to present a policy programme, the coalition simply would not exist anymore."

Lieberman said that "This is the only model that will allow us to cooperate with the Palestinians regarding two important fields — security and economics — and allow us to postpone the political decision regarding Jerusalem, borders and refugees to a later stage."

Lieberman criticised Netanyahu, saying that his plan to sign an agreement with the Palestinians within a year is not realistic.

He also rejected the demand of Turkey's foreign minister for an official apology by Israel over its attack on the Mavi Marmara Flotilla in which nine Turkish activists died on 31 March.

"The one who needs to apologise is the Turkish government for supporting the terrorism of Hamas and Hizbullah. There will be no apology, just the opposite; we are expecting one from Ankara," he added.