Israeli Prime Minister Ariel Sharon's comments Monday that talks were impossible with the current Palestinian leadership are "unacceptable", Palestinian negotiations minister Saeb Erakat said.

For Israel, "the only way to have peace is to negotiate with the Palestinians. Now he says he is negotiating with the Americans. That is really very, very disturbing. The situation will only get worse and worse," Erakat told the CNN network.

The fact that Sharon wants to negotiate "my future" with the Americans "is absolutely unacceptable," he said.

"There is no Palestinian leader with the necessary courage or capabilities to fight terrorism... Accordingly no negotiations can take place with the Palestinians," Sharon told parliament a day after a double Palestinian suicide attack in Israel killed 10 civilians.

"Sharon's official announcement that he will stop negotiating with the Palestinians means the pursuit of authoritarian and aggressive policies, and this could be a dangerous escalation," Erakat said.

He lambasted Sharon for scrapping a much-awaited summit with his Palestinian counterpart Ahmed Qorei in the aftermath of the Ashdod bombings and described the cancellation as "a fatal mistake".