* Palestinian leader says he can no longer accept status quo
* Clinton says Washington pressing to relaunch talks
(Adds details, background and byline)
By Mohammed Assadi
RAMALLAH, West Bank, Dec 3 (Reuters) - Palestinian President Mahmoud Abbas raised the prospect on Friday of dissolving the Palestinian Authority if a peace deal could not be achieved with Israel and the world did not recognise a Palestinian state.
In a television interview, Abbas said that if Israel failed to halt settlement building and U.S.-backed peace negotiations broke down, he would press for an end to the limited Palestinian self-rule in occupied territory.
"I cannot accept to remain the president of an authority that doesn't exist," Abbas said, referring to Israel's continued occupation of the West Bank.
Pressed by his questioner if he meant he would dissolve the Palestinian Authority, he replied: "I am telling them so. I say to them welcome ... you are occupiers. You are here, stay here, I cannot accept the situation will remain as is."
The Palestinian Authority was established after an interim peace deal with Israel in 1993 gave Palestinians limited autonomy in the West Bank, territory Israel captured in the 1967 Middle East war and where Palestinians want to establish a state.
Palestinian officials have express increasing frustration with the stalemate in the Washington-sponsored talks with Israel, which reached an impasse shortly after they resumed in September over the issue of Jewish settlements.
Abbas reiterated a Palestinian demand to halt Jewish settlement building, which Palestinians say deprives them of land for a viable state.
Israel's pro-settler coalition government has refused to stop the construction, saying the borders of a state must be negotiated alongside security issues, and sees the demand as an attempt to set preconditions for peace talks.
By suggesting he might seek to dissolve the self-rule arrangement if settlement building didn't stop, Abbas seemed to be trying to press for world recognition of a state, to bypass the negotiating process.
He said that, if Israel would not freeze settlements for three months, as Washington had proposed, he would ask the United States and the United Nations to recognise Palestinian statehood.
If such recognition were not forthcoming, Abbas said he would consider dissolving the Palestinian Authority.
U.S. Secretary of State Hillary Clinton dismissed talk that Israeli-Palestinian talks were near collapse, as a senior Palestinian official said this week, and said Washington was working intensively to relaunch negotiations.
In a television interview during a visit to Bahrain, Clinton said Washington planned to make new announcements as early as next week on the next steps in the peace process.
"We're going to have some additional consultations with both the Israelis and the Palestinians. But there are a number of ways that we're going to move forward," Clinton told Al Hurra television. (Writing by Allyn Fisher-Ilan; Editing by Andrew Dobbie) (allyn.fisher.thomsonreuters.com; +972-2-6322202; Reuters Messaging:email@example.com))
Our Standards: The Thomson Reuters Trust Principles.