Jerusalem - The former US president Jimmy Carter will visit Gaza for a rare meeting with senior Hamas officials following his criticism of a key speech by Israel's prime minister, Binyamin Netanyahu, on Sunday night.

    Carter, who has been in Israel and the occupied West Bank over the past week, will be one of the most senior western figures to meet the Hamas leadership in Gaza in recent years. He is expected to meet, among other Hamas officials, Ismail Haniyeh, the former Palestinian prime minister.

    Last month in Damascus he met Khaled Meshal, the head of the Hamas political bureau and the group's effective leader. Carter has been meeting Israeli officials and travelled to a Jewish settlement on the West Bank at the weekend as part of his private diplomatic efforts. His visits are not always welcomed by the Israeli government, which has been angered by his meetings in recent years with Hamas.

    On Sunday Carter criticised a policy speech given by Netanyahu, in which the Israeli prime minister, responding to weeks of pressure from Washington, gave carefully worded approval for a future Palestinian state under strict conditions, but insisted "normal lives" should continue in Jewish settlements in east Jerusalem and the West Bank.

    "My opinion is he raised many new obstacles to peace that had not existed under previous prime ministers," Carter said during a visit to the Knesset in Jerusalem.

    "He still apparently insists on expansion of existing settlements, he demands that the Palestinians and the Arabs recognise Israel as a Jewish state, although 20% of its citizens here are not Jews. This is a new demand."

    But Carter said he had encountered even greater differences with the former Israeli prime minister, Menachem Begin, and had still managed to broker a peace deal between Israel and Egypt.

    In an interview today on US television, Netanyahu said he wanted to reduce the differences between his government and Barack Obama on settlements.

    "President Obama and I are trying to reach a common understanding on this," Netanyahu said. "I think we'll find some common ground."

    The White House described his speech as "an important step forward" and the EU said it was "a step in the right direction", although plans to upgrade trade relations between Israel and Europe remain frozen.

    But Palestinian officials were dismayed and called on the international community to challenge Israel.

    "The international community should confront this policy, through which Netanyahu wants to kill off any chance for peace," said Yasser Abed Rabbo, an adviser to the Palestinian president, Mahmoud Abbas.

    He said Netanyahu should be pressed to accept the 2003 US road map, which he notably did not mention in his speech. Nor did he mention the Arab peace initiative, under which the Arab countries offered full diplomatic recognition of Israel in return for a Palestinian state on land occupied by Israel in 1967, with a capital in east Jerusalem and an agreed solution to the fate of Palestinian refugees.

    Instead, Netanyahu's vision of a Palestinian state was one that was demilitarised, with no army, and with strict border controls and no military agreements with other states. It would not have a capital in east Jerusalem, and no Palestinian refugees who fled or were forced from their homes in 1948 would be allowed to return to what is now Israel. He did not talk of removing settlements, now home to nearly 500,000 Jewish Israelis in east Jerusalem and the West Bank. Netanyahu also insisted the Palestinians recognise Israel as a Jewish state.

    In Cairo, Hosni Mubarak, the Egyptian president, said recognising Israel as a Jewish state effectively meant ruling out any return of Palestinian refugees and "increases the complexity of the matter and aborts the chance for peace".

    Within Israel, reaction to Netanyahu's speech was mixed. Some among his rightwing coalition were angry that he even mentioned a Palestinian state, others were encouraged by it.

    Most, however, said the future would be determined by actions taken on the ground.