President George W Bush has backed Ariel Sharon's controversial template for the future of the Middle East.
Mr Sharon 'got everything he wanted'
He called the Israeli leader's plan to withdraw from some Palestinian territory "historic and courageous".
Mr Sharon proposes unilaterally pulling Israelis out of the Gaza Strip and parts of the West Bank - and keeping some Palestinian land in the West Bank.
Palestinians reacted angrily, with leader Ahmed Qurei saying it "kills the rights of the Palestinian people".
The Palestinian prime minister said Mr Bush had apparently given "himself the right to make concessions on behalf of the Palestinians... we cannot accept this under any circumstances".
"He is the first president who has legitimised the settlements in the Palestinian territories when he said that there will be no return to the borders of 1967."
Meanwhile UN Secretary General Kofi Annan advised against unlateral statements.
"The secretary general reiterates his position that final status
issues should be determined in negotiations between the parties
based on relevant Security Council resolutions," a spokesman for Mr Annan
said in a statement.
"He strongly believes that they should refrain from taking any
steps that would pre-empt the outcome of such talks."
But the BBC's Jon Leyne in Washington says Wednesday's announcement will be popular among both Democrat-voting US Jews and the Christian right who make up a crucial part of his own power base.
The concessions will be difficult if not impossible for a future US president to repudiate, our correspondent says.
'End to conflict'
The "disengagement" plan envisages Israel uprooting all settlements on the Gaza Strip but keeping six settlement blocs in the West Bank.
After a meeting between the two men at the White House, Mr Bush said: "If all parties choose to embrace this moment they can open the door to progress and put an end to one of the world's longest-running conflicts."
West Bank settlers (not including East Jerusalem): 240,000
Settlement block populations:
Maale Adumim - 30,000
Ariel - 18,000
Kiryat Arba - 4,000
Hebron enclave - 500
Givat Zeev - 10,000
Gush Etzion - 30,000
It could lead to a "peaceful, democratic, viable Palestinian state," he added.
But he seemed to disregard Palestinian insistence that the borders of a new state should be negotiated between the two sides, and should be based on the 1967 borders, before Israel took control of the West Bank and Gaza.
He said the "realities on the ground and in the region have changed greatly" and should be reflected in any final peace deal.
In another concession to Mr Sharon, the president said any Palestinian refugees who wanted to return should be accommodated on Palestinian land.
The solution to the Palestinian refugee problem, he said, "will need to be found through the establishment of a Palestinian state and the settling of Palestinian refugees there - rather than Israel".
Mr Sharon said his plan would create "a new and better reality for the state of Israel", and would form the basis of renewed negotiations with the Palestinians.
In Britain, Prime Minister Tony Blair welcomed Mr Sharon's ideas, and called on the international community to "inject new life into the
Observers say he hopes that Mr Bush's endorsement - which coincided with Israeli prime-time television - will sway critics in his own Likud party and among settlers.
But Palestinians fear the Sharon plan could scupper the "roadmap" peace plan and with it, their chances of establishing a state that includes all of the West Bank and Gaza.
Palestinian negotiations minister Saeb Erekat slammed the US, saying the plan "violated UN resolutions".
Palestinian leader Yasser Arafat said US support would mean "clearly the complete end of the peace process", and warned it would lead to a "cycle of violence".
About 92,500 Jews live in the six West Bank settlements Mr Sharon wants to keep - out of a total of 240,000 in the West Bank, or 400,000 if east Jerusalem is included.
Another 7,500 live in enclaves in the Gaza Strip, alongside 1.3 million Palestinians.