The exiled leader of Hamas, the militant group that won last month’s Palestinian elections, was in the Egyptian capital Cairo meeting other Hamas officials to discuss the formation of a new Palestinian government.
"Hamas does not recognise Israel and we won't accept anybody in the world forcing us into a corner," Khaled Meshaal told journalists.
The EU and US want Hamas to renounce violence and abandon its commitment to Israel's destruction and have threatened to withhold Palestinian aid unless the group changes its charter.
In a BBC interview, Meshaal said Hamas "could possibly give a long-term truce" but only if Israel withdrew from the occupied West Bank, recognised a right of return for Palestinian refugees and dismantled all settlements.
"We now say that if Israel withdraws to the 1967 borders, there could be peace and security in the region and agreements between the sides until the international community finds a way to solve everybody's problems," he said.
Israel has rejected those conditions, first voiced by Ahmed Yassin, a Hamas leader it assassinated in 2004.
"Truce would be long-term but limited, because there's a Palestinian reality the international community must deal with.
"There are those kicked out of their land in 1948, the international community must find a solution for those people."
In Cairo, Meshaal said: "Let Israel make an offer, let it recognise our rights and it's up to the international community to oblige it to do that."
Meshaal also said Hamas, which led a campaign of suicide attacks against Israel during the Palestinian uprising, would not stop "resistance".
Arab funding
The US and Europe have threatened to stop aid to the Palestinians if Hamas heads a new government and does not recognise Israel’s right to exist.
Mr Meshaal said he expected Arab funding for the Palestinians and the new government to be arranged "in the coming days".
"If the door of the West is closed, the door of the Arab and Islamic east should stay open," he said.
"We have heard good promises and excellent commitment (from Arab and Islamic states)," he added.
Egyptian intelligence chief Omar Suleiman has predicted Iran might fill any finance gap if the European Union and United States cut aid to a government led by Hamas.
Talks on new government
Hamas is trying to form a coalition government including the defeated Fatah faction, which long dominated Palestinian politics.
Fatah has yet to tell Hamas whether it will take part, while Islamic Jihad has ruled out joining the new government.
Mr Meshaal gave no details on any possible government beyond saying talks were continuing with all factions.
"There is still time to reach understanding with these forces."
The Hamas leaders discussed the new government with Egyptian officials, who have played a frequent role in brokering talks between Palestinian factions.
Palestinian President Mahmoud Abbas, a Fatah member, has said he would expect the future government to respect interim peace deals with Israel.
Hamas's charter calls for Israel's destruction but the group has largely abided by a ceasefire Mr Abbas declared with Israel a year ago.