JERUSALEM - Israel's foreign minister said Sunday that a peace deal with the Palestinians was impossible under current conditions and that Israel should pursue a lesser deal instead - a concept the Palestinians swiftly rejected.

The latest diplomatic spat came as violence along the Israel-Gaza border simmered. After days of accelerated Palestinian rocket attacks on southern Israel and Israeli air strikes in response, Israeli soldiers killed two Palestinians on the border early Sunday.

Avigdor Lieberman, the foreign minister, said at a conference of Israeli diplomats that instead of a full peace deal, Israel should seek a long-term, interim agreement on security and economic matters. Palestinians have consistently rejected that approach.

"It's not only that it is impossible" to reach an overall agreement, he said. "It is simply forbidden."

Lieberman said the Palestinian Authority, with which Israel has pledged to negotiate, is "not legitimate" because it has postponed elections. Palestinian Authority President Mahmoud Abbas remains in office though his term expired almost a year ago, and no date has been set for a new election.

Lieberman is known for expressing hard-line views that do not always represent those of Israeli Prime Minister Benjamin Netanyahu. The prime minister says he seeks a negotiated, final peace deal with the Palestinians but has declined to give specifics.

Netanyahu's office said Lieberman's comments reflected "his personal positions," not those of the government.

Talks between Israel and the Palestinian Authority broke down in September after an Israeli freeze on settlement construction expired. The Palestinians say they will not negotiate as long as Israel builds homes for Jews in the West Bank and East Jerusalem, lands the Palestinians claim for a future state.

U.S. mediators have returned to indirect talks to seek a way out of the impasse.

Palestinian Authority spokesman Ghassan Khatib rejected Lieberman's comments, saying that most world governments - including Israel's - recognize the Palestinian Authority as legitimate.

Violence again hit Israel's border with Gaza on Sunday, threatening a de facto two-year truce.

The Israeli military said it launched an air strike after spotting two men trying to plant explosives along the border. The Islamic Jihad militant group said that two of its members died in a clash with Israeli ground troops. The two accounts could not immediately be reconciled.