Palestinian Prime Minister Ahmed Qurei says he will push for a single Arab-Jewish state if Israel carries through a threat to draw up its own borders.
The US rejected Qurei's suggestion
"We will go for a one-state solution... there's no other solution," he told news agencies on Thursday.
Israel has promised to take unilateral steps to redefine borders if the Palestinians fail to end violence.
Meanwhile, the Israeli army has arrested at least 15 Palestinians in a raid in the West Bank town of Jenin.
Witnesses said more than 25 armoured vehicles entered the refugee camp in the town and there were exchanges of fire between gunmen and troops, but no casualties were reported.
Among those detained were Attar Abu Remeli, a local leader from Palestinian Leader Yasser Arafat's Fatah party.
Last week, Israeli troops pulled out of Jenin - lifting a blockade imposed in August 2003 - after what the army described as a reassessment of the security situation there.
US rejects Qurei stance
There has been no official Israeli reaction to Mr Qurei's remarks, but an unnamed source told AFP news agency Israel "categorically" rejected the idea of a unitary state.
A bi-national state, incorporating pre-1967 Israel, the West Bank and Gaza Strip, could contain an Arab majority and Jewish minority in the near future.
The barrier is huge source of tension
Presently, there are about 5.5 million Jews and 1.2 million Arabs in Israel, and 3.5 million Palestinians in the West Bank and Gaza.
US Secretary of State Colin Powell said America was "committed to a two-state solution".
"I believe that's the only solution that will work: a state for the Palestinian people called Palestine and a Jewish state, state of Israel," he said.
"They've got to get going and they have got to wrest
authority away from [Palestinian President Yasser] Arafat that
will allow [Mr Qurei] to start taking action with respect to terror and violence," he added.
Mr Powell said Assistant Secretary of State William Burns would go to Egypt next week, partly to urge the Egyptians to call upon Mr Qurei to disband Palestinian groups responsible for attacking Israel.
Palestinians 'like chickens'
Israeli Prime Minister Ariel Sharon last month revealed plans to seize parts of the West Bank if he felt the peace process was unable to make any further progress.
Palestinians regard the proposals as a way of taking their land and avoiding the US-backed roadmap peace plan, which aims for a Palestinian state in the West Bank and Gaza next to a secure Israel by 2005.
In an interview with Reuters news agency, Mr Qurei attacked the barrier Israel is building between Palestinian and Jewish settlements.
He described it as an attempt to "put Palestinians like chickens in cages".
"The wall is to unilaterally mark the borders, this is the
intention behind the wall... It will kill the roadmap and kill
the two-state vision," he said.
But Israel says the barrier is not a political border, and it has already prevented many suicide bombings.