Palestinian leaders said Saturday there was still hope for creating a Palestinian state by next year as scheduled if the United States is willing to push for serious peace talks.

The comments came after President Bush suggested that the internationally backed "road map" peace plan's call for an independent Palestinian state in 2005 was unrealistic.

Meanwhile, police said an explosion went off in a grocery store in an Arab neighborhood of Jerusalem. At least five Palestinians were injured, three seriously.

The cause of the blast was not clear. The explosion caused considerable damage to the grocery, which is located near Damascus Gate, one of several entrances to the walled Old City.

Police said the blast was caused by a concentration of gas, not a bomb. The source of the gas was not known.

Also Saturday, Israeli Justice Minister Tommy Lapid (search) threatened to pull his moderate Shinui party out of the government if Prime Minister Ariel Sharon (search) does not find a way to implement his planned withdrawal from the Gaza Strip.

In an interview published with the Egyptian newspaper Al-Ahram, Bush said ongoing violence had pushed back the road map's schedule for Palestinian statehood.

"I think the timetable of 2005 isn't as realistic as it was two years ago," he said, according to a White House transcript of the interview released Friday.

Bush's comment angered Palestinian leaders, who insisted a state could still be formed according to schedule.

"It is realistic and more," Palestinian leader Yasser Arafat (search) told reporters outside his compound in the West Bank city of Ramallah.

Palestinian Prime Minister Ahmed Qureia (search) called on Bush to reconsider his statement. "We have plenty of time to seriously negotiate, if the American administration indeed wants serious negotiations and wants to reach a final agreement," he said.

"There is no longer an opportunity to delay this matter," Qureia said. "Wasting time is not in the interest of the peace process and stability in the region."

Negotiations between Israel and the Palestinians have stalled amid the continuing violence and both sides' refusals to fulfill their initial road map obligations. Israel has yet to pull down scores of unauthorized settlement outposts in the West Bank, and the Palestinians have said they will not dismantle militant groups for fear of sparking a civil war.

On Saturday, the militant Islamic Jihad group condemned the Palestinian Authority for arresting two of its militants -- a would-be suicide bomber and his recruiter -- and called on its members to open fire at Palestinian security officers who come to arrest them.

In a statement distributed in mosques in the West Bank town of Jenin, the group accused Palestinian security officials of trying to curry favor with Israeli intelligence agents for personal gain.

With the road map stalled, Sharon had proposed a unilateral Israeli withdrawal from Gaza and a small part of the West Bank. His "disengagement" plan was defeated in a nonbinding referendum of members of his Likud Party.

Hard-liners in Sharon's government said the defeat signaled the end of the plan, but Lapid demanded Saturday that it be presented to the Cabinet anyway, with only minimal changes.

The Cabinet was expected to discuss the plan at its weekly meeting Sunday.

"We are not ready to abandon the program," Lapid told The Associated Press. "If there is no progress we will have to consider leaving (the government)."

The withdrawal of Shinui, the second-largest member of Sharon's coalition, could bring down the government, though the premier would likely replace it with ultra-Orthodox parties, which strongly oppose Sharon's proposal.

Sharon himself says he remains committed to his plan to pull out of all 21 Gaza settlements and four others in the northern West Bank.

"We must find a way to implement the disengagement plan because of its importance for the future of Israel," he said Friday.