A senior Palestinian official said Monday that Yasser Arafat's (searchgovernment is considering declaring a state in the West Bank, Gaza Strip and east Jerusalem if Israel tries to impose a boundary on the Palestinians.

The possibility was raised at a meeting of Palestinian leaders over the weekend, said Yasser Abed Rabbo (search), who is close to Arafat.

Abed Rabbo said many of those present supported the idea, but did not say whether Arafat was also in favor. However, other participants said the proposal was only raised informally and was not part of the agenda.

Abed Rabbo insisted that declaring independence — which would mean walking away from the U.S.-backed "road map" peace plan — was a serious option.

"We are not discussing this as an academic exercise," Abed Rabbo told a news conference. "We are discussing this as a real possibility."

A statehood declaration would come as a counter move to Israeli Prime Minister Ariel Sharon's (searchplan to "disengage" from the Palestinians, in the event efforts fail to revive peace talks in coming months.

Sharon has proposed redeploying Israeli troops, dismantling some settlements and imposing a boundary on the Palestinians. In such an arrangement, the Palestinians would end up with far less territory than they seek for their state.