Prime Minister Yitzhak Shamir Thursday rejected a proposal by right-wing groups that Israel annex the occupied territories now that Jordan has cut administrative ties to the West Bank and Gaza Strip.

Shamir said in an interview with Israel's armed forces radio that the status of the territories, which are home to 1.5 million Palestinians, should be subject to peace negotiations with Palestinians who don't belong to or identify with the PLO."We honor our international obligations and we shall not make any unilateral step, like imposing Israeli rule on the territories that are subject to negotiations," Shamir said.

He was referring to the 1978 U.S.-negotiated Camp David accords between Egypt and Israel, which call for five years of autonomy for Palestinians before negotiations on the final status of land captured from Jordan and Egypt in the 1967 Middle East war.

Palestinians oppose any solution short of an independent state and have demanded that any settlement be negotiated with Yasser Arafat's Palestine Liberation Organization.

Last week, King Hussein abandoned any Jordanian claims to the West Bank, challenging the PLO to set up a Palestinian state in the occupied lands, where it has been leading an 8-month-old uprising. Hussein also laid off about 21,000 employees paid by Jordan in the West Bank and Gaza Strip.