Israel is set to give the Palestinians until the end of 2006 to show they are ready to negotiate a final peace deal, Israel's justice minister has said.
Ehud Olmert wants international support for his plans
Otherwise Israel could unilaterally fix its final borders by 2008, the AP news agency quoted Haim Ramon as saying.
Israeli PM Ehud Olmert says fixing the borders is a government priority.
He has refused to hold talks with the Palestinians until militant group Hamas renounces violence and respects Israel's right to exist.
Hamas, which controls the Palestinian government, says Israel is not really interested in talks, while Palestinian President Mahmoud Abbas has tried to persuade the Israelis to bypass Hamas and negotiate with him.
In a speech on Tuesday night, Mr Olmert said he was ready to wait up to six months to see if progress could be made before taking unilateral steps.
"If the Palestinians do not accept these conditions, Israel will have to determine its borders by itself," he said.
Mr Olmert has said he wants to set permanent borders for Israel by 2010 but last month one of his senior aides said they would complete their plan to impose a border in the West Bank by the end of US President George W Bush's term in 2008.
The plan involves removing dozens of isolated Jewish settlements from the occupied west Bank while keeping the main settlement blocs as what Mr Olmert calls "forever an inseparable part of the state of Israel".
Palestinians say the plan aims to deny them a viable state.
Palestinians fear Israel's barrier is being used to redraw borders
"Throughout the end of this year, 2006, there will be honest attempts to talk to the other side," Mr Ramon said in an interview with Israel's Army Radio and quoted by AP.
"I would like to believe that by the end of 2008 we will be deployed on a line that will signify Israel's final borders and guarantee our existence here as a Jewish democratic state," he said.
His comments brought a swift reaction from the Palestinians.
"Haim Ramon's assertion that Israel is ready for negotiations is no more than an attempt to trick the public," Palestinian government spokesman Ghazi Hamad told AP.
"They don't want negotiations and even if there were negotiations, they would not give us our rights."
Israel occupied the West Bank during the 1967 Arab-Israeli war. Its settlements in the territory are considered illegal under international law, although Israel disputes this.