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JERUSALEM (AP) — Ariel Sharon told his stunned country Monday he was determined to reach a peace deal and end 36 years of rule over the Palestinians — the strongest sign yet that the prime minister's endorsement of a Mideast peace plan may have been more than a ploy to deflect international pressure.

The speech marked the first time the veteran hawk, who had long argued that a Palestinian state would pose a mortal danger to Israel, publicly used the word "occupation" to refer to Israel's presence in West Bank and Gaza Strip.

The word is anathema to the Israeli right, which believes Israel has a legitimate claim to the West Bank and Gaza for religious and security reasons.

"To keep 3.5 million people under occupation is bad for us and them," Sharon told angry conservatives in his Likud Party in remarks broadcast on Israel Radio.

Palestinians claim all of the West Bank and Gaza for a state.

On Sunday, Sharon's Cabinet conditionally approved the U.S.-backed "road map," a three-phase plan that begins with a halt to violence and envisages a Palestinian state in the West Bank and Gaza Strip in 2005.

Sharon's remarks indicated his surprising turnaround could be genuine. The ex-general was nicknamed "the bulldozer" for ramming West Bank settlement programs through successive Cabinets, and once argued that giving up even 13 percent of the West Bank and Gaza would endanger Israel's security.

"This can't continue endlessly. Do you want to remain forever in Ramallah, Jenin, Nablus?" he asked his party's lawmakers, listing towns in the West Bank.

The Cabinet's approval of the road map plan, coupled with a list of conditions, was carefully worded to allow Israel to dodge measures that are toughest for Sharon's government to accept. Palestinians, who already accepted the plan, insisted it must be implemented unchanged.

In his remarks Monday, Sharon left himself a way out.

"What will happen if Palestinian terror continues? Nothing. Nothing will happen. The Palestinians will get nothing," he told the lawmakers.

Critics have said Sharon's long-held condition that all violence must stop before peace moves forward is unrealistic and guarantees the stalemate will continue.

Israeli Foreign Minister Silvan Shalom also warned Arab neighbors Monday it will never accept the return of Palestinian refugees or their descendants to its territory under any peace settlement.

He urged Arab states to accept the refugees and their families, estimated at some 4 million, on a permanent basis. The road map says that the two sides must negotiate over the refugee issue toward the end of the peace process.

Still, Israel's conditional acceptance of the "road map" left some Arab leaders cautiously hopeful.

"We are on the verge of peace," said Jordanian Foreign Minister Marwan Muasher. "We believe the road map is very clear. Jordan is ready to do its part in a good faith manner."

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