The Palestinian President, Mahmoud Abbas, has said he hopes to reach a comprehensive peace deal with Israel’s government "within one year".

Mr Abbas also told Israel’s Maariv newspaper that US President George W Bush wanted to see a Middle East peace accord before he leaves office in 2009.

A "final formula" would have to be agreed and a timetable set, he added.

The announcement came after a report in another Israeli newspaper outlined the terms of the possible peace offer.

Haaretz said on Wednesday that Israel was ready to offer the Palestinians a state in 90% of the West Bank and Gaza Strip.

The proposal would also include a tunnel to link the two Palestinian territories, and a land-swap that would allow major Jewish settlement blocs in the West Bank to become part of Israel.

In the Maariv interview, Mr Abbas said the US was "determined to push the parties into reaching an agreement during President Bush’s current term".

"I heard this in person from the president himself and from Secretary of State [Condoleezza] Rice," he said.

"We have to reach the final formula, the end game, and then think about the implementation and set a timetable for the implementation on the ground," Mr Abbas added.

"The timetable may be long, but what is important is for the Palestinians to know the final result, the end game, from the outset."

The Palestinian leader said he would insist on a number of principles for any final agreement, including a Palestinian state including pre-1967 borders with East Jerusalem as its capital.

The issue of Palestinian refugees would have to be resolved "in a fair and just way", he added.

On Wednesday, Israeli Prime Minister Ehud Olmert declared he had "started very seriously to talk with Mr Abbas on a peace process and questions which can allow a Palestinian state to be established".

Mr Abbas also said that there was "a wish and a decision to have early elections" in the Palestinian Territories.