Israeli Foreign Minister Tzipi Livni says her country's Arab citizens will only be able to fulfill their national aspirations outside of Israel.

Israel's Foreign Minister Tzipi Livni (file photo)

Livni said Thursday that for Israel to remain a Jewish and democratic state, it must be one of two distinct national entities. She says Israeli Arabs must find their national solution "elsewhere."

Israeli Arab lawmaker Ahmed Tibi said Livni must clarify if she intends to strip one million Israeli Arabs of political rights and transfer them to a future Palestinian state. Livni is vying for the post of prime minister in February elections as head of the centrist ruling Kadima Party.

Her main rival and opposition leader, Benjamin Netanyahu of the Likud Party, told foreign ambassadors Thursday that he favors continuing peace talks with the Palestinians. But he says the talks should focus on improving the Palestinian economy, rather than resolving borders and other core issues of the conflict.

Likud Party members elected a list of parliamentary candidates this week that includes several ultranationalist politicians who oppose concessions to Arabs. If Likud wins the most seats in the election, as opinion polls suggest, Netanyahu would return to the prime minister's job that he last held from 1996 to 1999.

Palestinian President Mahmoud Abbas says he is willing to work with any elected Israeli prime minister. He made the comment to the London-based Arabic newspaper Asharq Alawsat in an article published Thursday.

In another development, Israel allowed a truck to deliver $25 million in cash to the Gaza Strip from banks in the West Bank. Palestinian officials say the money will be used to pay the salaries of civil servants in Gaza.

Israeli authorities had suspended the cash transfers in October and tightened other sanctions on Gaza in response to renewed rocket attacks on Israel.

Some information for this report was provided by AP, AFP and Reuters.