US President George W Bush has said the deadline for setting up a Palestinian state has slipped due to violence and a change of Palestinian leaders.
Palestinians fear delaying a state is in Israel's interest
"I think the timetable of 2005 is not as realistic as it was two years ago," Mr Bush told Egypt's al-Ahram daily.
Responding to the remarks, Palestinian leader Yasser Arafat said the 2005 deadline was "more than realistic".
Palestinian Prime Minister Ahmed Qurei will meet US National Security Adviser, Condoleezza Rice, this month in Berlin.
Institutions before state
Mr Bush said the US remained committed to the internationally-accepted peace plan for the Middle East - the roadmap, and would underline this with a letter to Mr Qurei.
"Well, 2005 may be hard, since 2005 is right around the corner. I readily concede the date has slipped some, primarily because violence sprung up."
Mr Bush said the violence, as well as the replacement of Palestinian Prime Minister Mahmoud Abbas - known as Abu Mazen - had "changed the dynamic".
"I don't want to make any excuses," the US leader said, adding: "I do think we ought to push hard as fast as possible to get a state in place.
Palestinian leaders, he said, ought to focus "on the right now" - rather than the future.
"I'm somewhat amazed that the debate has already started about what the end results are going to look like when we haven't even really begun yet to establish a state.
"I think the focus ought to be on putting the institutions in place for a Palestinian state that is peaceful and prosperous to emerge."
In his battered compound in the West Bank town of Ramallah, Yasser Arafat rejected Mr Bush's comments.
"It's unrealistic to further put off the creation of a Palestinian state," Mr Arafat told reporters.
He said one ought to have been proclaimed in 1998-99 under the peace agreements signed with Israel.
Mr Qurei agreed with his leader.
"I think that we have plenty of time from this moment until the end of 2005... to work towards a comprehensive and permanent agreement," Mr Qurei said.
"If we are delayed, that means that we are giving in to the desire of the Israeli government to stretch out the negotiations and drag them out, for another 10 or 15 years as I have heard many times in the Israeli press.
"By then, no-one will have the ability to take control of the situation."
His talks with Ms Rice will be the Palestinian prime minister's first meeting with a senior member of the Bush administration since he took office last year.