The Palestinian Authority needs $650 million in foreign aid by June and an international meeting in Oslo next month will try to raise some of the funds, the U.N. envoy in the Middle East said on Sunday.

Terje Roed-Larsen, special representative of U.N. Secretary-General Kofi Annan, said the meeting on Dec. 7 and 8 would have symbolic importance as the first of its kind this year to bring Israelis and Palestinians together.

"This meeting will be important not only for the symbolic reason ... but also because the Palestinian Authority is in dire need of budgetary support," he told a news conference after talks with Egyptian President Hosni Mubarak.

"They will need about $650 million before June next year and this meeting will be crucial in order to contribute to the underpinning of the Palestinian Authority," he said without elaborating on the budgetary needs.

The Palestinian Authority is facing severe financial crisis due to falling tax revenues during four years of violence which paralysed the Palestinian economy.

The group which is meeting is known as the Ad Hoc Liaison Committee, which coordinates assistance to the Palestinians, the Norwegian embassy in Cairo said. It includes major donors and governments in the region, including Egypt.

Palestinian leaders Mahmoud Abbas and Ahmed Qurie also saw Mubarak in Cairo on Sunday, on their first trip abroad since the death of Palestinian President Yasser Arafat on Nov. 11.

Egypt has offered to help the Palestinian Authority prepare to maintain security in Gaza after a possible Israeli pullout.

Roed-Larsen said: "I've been reassured by my Egyptian counterparts ... that Egypt will continue to contribute particularly in the security field."

Egyptian Foreign Minister Ahmed Aboul Gheit and intelligence chief Omar Suleiman will visit Israel and the Palestinian territories this week to talk about the plan.

The Egyptian officials had been due to visit Israel on Nov. 24, but plans were postponed after an Israeli tank crew killed three Egyptian policemen on the border with Gaza.

Abbas, who is acting chairman of the Palestine Liberation Organisation and Fatah's candidate to succeed Arafat, told a separate news conference that Egypt and the Palestinians would carry out previous agreements on security and training.

Speaking at the Arab League later, Abbas said that the Palestinians would not accept an interim settlement with Israel and that a Palestinian state in 2005 was possible.

The Middle East peace plan known as the road map sets 2005 as the target date for a Palestinian state but U.S. President George W. Bush said this month that he now hoped to achieve that during his second term, which ends in 2009.

"We will not accept a temporary solution... It's a waste of time. Even a state with interim borders is a waste of time. We're only 13 months from (the end of) 2005 so that's enough to negotiate and put an end to this problem," he said.