RAMALLAH/JERUSALEM  -Palestinian president Mahmud Abbas pledged on Monday that the coming year would see the implementation of Palestinian independence.

Lighting a torch in the grounds of his West Bank headquarters to start celebration of the the 48th anniversary of his Fatah movement he spoke of last month's historic United Nations vote upgrading the Palestinians's diplomatic standing, referring to it as the "birth certificate" of a Palestinian state.

"We have a birth certificate... and we want to complete the march toward full independence," he said. "Next year, 2013, will be the year of statehood and independence." Despite the UN vote and widespread international support for Palestinian statehood, Israel still occupies the West Bank, maintains tight controls of movement of goods and people to and from the Gaza Strip and has annexed largely-Arab east Jerusalem.

Direct peace talks between Israel and the Palestinians began in September 2010 but ran around several weeks later over an intractable dispute about settlement building, and international efforts to bring the two sides closer together have so far led nowhere. Fatah is on Tuesday to mark its anniversary in the Gaza Strip for the first time since its rival, Hamas, seized power there in 2007.

Under Egyptian mediation, the two groups made a reconciliation agreement in April 2011, although it has so far not been implemented.Abbas called for the deal to be completed, saying that there was a Palestinian "national consensus" for unity, which was needed for the Palestinians "to build on what has been achieved with the recognition of our state and the steadfastness in the face of Israeli aggression on the Gaza Strip."  The Fatah anniversary commemorates the first operation against Israel claimed by its armed wing then known as Al-Assifa (The Thunderstorm in Arabic) on January 1, 1965.

 Israeli President Shimon Peres said on Monday that there is no fundamental reason not to talk to the Palestinian Hamas if it renounces violence and decides to take a constructive course. "There is nothing wrong with talking with Hamas, if you get an answer," Peres told local Christian leaders at a New Year's reception in Jerusalem.

"But Hamas and Gaza have to decide what do they want, peace or war," he added in remarks in English broadcast by Israeli army radio. The radio's website quoted Peres as saying that future relations were up to the Islamic Hamas itself, which rules the Gaza Strip and espouses violent opposition to the Jewish state.

"What kind of relationship do they want to have with Israel," it quoted him as saying. "A relationship of shooting or of building ? If they want to build, Israel would be happy to see them succeed.

We take no pleasure in seeing anyone, young or old, suffering in Gaza." Israel and much of the international community formally shun Hamas as a terror organisation.

The so-called Quartet of Middle East peacemakers - the European Union, Russia, the United Nations and the United States - demands that Hamas recognise Israel, renounce violence and pledge to honour existing Palestinian agreements with Israel if it wants to become a diplomatic player.

Peres's office did not release a full transcript of Monday's remarks but said in a statement that "President Peres stressed that he opposes negotiations with Hamas while they reject the three principles of the Quartet."

Peres on Sunday raised rightwing hackles by saying that Palestinian president Mahmud Abbas was a willing partner for peace with whom an agreement could be reached.

"There is currently no other Arab leader who is saying he is in favour of peace, against terror, in favour of a demilitarised (Palestinian) state," Peres told a conference of Israeli diplomats.

"I have known Abu Mazen for 30 years, and nobody will change my opinion of him," he said using the name by which Abbas is familiarly known in Arabic.

Peres, whose constitutional role is largely ceremonial and is supposed to put him outside the political debate, drew a swift rebuke from Prime Minister Benjamin Netanyahu's Likud party, which is contesting a January 22 general election in alliance with the ultra-nationalist Yisrael Beitenu party.

"It is very saddening that the president chose to express a personal political opinion that is contrary to the Israeli public's stance on Abu Mazen, the peace refuser," a statement from the party read.

But Peres's Monday statements were echoed by opposition leader Shaul Mofaz in remarks to students near Tel Aviv, also carried by army radio.

"As long as it is a terror organisation with a murderous ideology... we shouldn't talk to it," he said. "Is there a possibility that in the future we shall to them? The answer is yes, on condition that it accepts the Quartet's conditions."

Mofaz, who heads the centrist Kadima party, said earlier this month that Israel should have assassinated Hamas leader Khaled Meshaal during a four-day visit to Gaza in which he vowed never to give up even "an inch" of Palestinian territory or recognise the Jewish state.