Senior Israeli officials say they will wait six months before deciding whether to move unilaterally to set Israel's final border with the Palestinians.
Until now, Israeli officials have avoided putting a strict timetable on their plan to draw Israel's final border with the Palestinians, saying only they will do so by 2010.
But Israel's Justice Minister Haim Ramon told Israeli Radio that Israel could move faster and demarcate its West Bank border by the end of 2008.
In a warning to Palestinians, Ramon also says Israel will only wait until the end of this year to see if Palestinians are willing to negotiate a border. He says if Israel sees no progress by then it will move unilaterally.
Ramon's remarks were echoed later by Prime Minister Ehud Olmert, who has insisted that no talks will take place until the Hamas-dominated government agrees to recognize Israel. He says he prefers to negotiate with the Palestinians, but he will not wait much longer for Palestinians to agree to his conditions.
"If they will accept these principles then fine for us, we are ready to talk," he said. "If we wait a month, two months, three months or half a year and we do not see any change, then most likely we are going to move forward even without an agreement, or without negotiations."
Palestinian President Mahmoud Abbas has asked for direct Israeli-Palestinian talks to begin immediately, but Israeli officials say there will be no talks with the Palestinians, unless Hamas agrees to its precondition of recognition - something Hamas has refused to do.
Palestinian negotiator Saeb Erekat told reporters that Palestinians are ready and willing to negotiate.
"Well I believe the Israeli government knows they have a partner. President Abbas [Abu Mazen] stands fully ready to resume the permanent status negotiations," said Erekat. "I believe borders and other issues of permanent status such as Jerusalem and the status of refugees must be determined and decided through negotiations, and not through dictation. So if the Israeli government really wishes to get to the end game, and the end of conflict and a peace treaty, we stand fully ready."
Under a disengagement plan first publicly proposed by former Prime Minister Ariel Sharon, and adopted by his successor Ehud Olmert, Israel will pull back from most settlements in the West Bank. The plan would concentrate settlers in three large settlement blocs in the West Bank, while demarcating Israel's border along the route of the controversial separation barrier.
Palestinians have condemned the plan saying it amounts to a massive land grab that violates international law.