Palestinian chief negotiator Saeb Erakat played down on Tuesday a threat to dissolve the Palestinian Authority if US-sponsored peace talks remain deadlocked.

Palestinian chief negotiator Saeb Erakat played down on Tuesday a threat to dissolve the Palestinian Authority if US-sponsored peace talks remain deadlocked.

"No Palestinian is speaking of an initiative to dismantle the Palestinian Authority (PA)," chief negotiator Saeb Erakat told AFP.

"But Israel's actions have annulled all the legal, political, security, economic and operational aspects of the prerogatives of the Palestinian Authority."

Palestinian negotiators had warned that they may hand responsibility for governing the occupied territories back to Israel if peace talks remain stalled, a senior Palestinian official said Sunday.

He said the Palestinians had told US peace envoy Martin Indyk that unless Israel releases Palestinian prisoners as agreed and freezes settlement building, they could dismantle the Authority, which was set up following the