Foreign Minister Avigdor Lieberman on Monday lashed out at fellow ministers for espousing contradictory solutions to the conflict with the Palestinians, maintaining Israel needed one binding diplomatic plan.

"Four senior ministers, appearing one after the other and each taking a totally different diplomatic direction, created a grotesque spectacle," he said, referring to a series of presentations by senior ministers at the Herzliya security conference on Sunday.

During back-to-back presentations, Justice Minister Tzipi Livni said Israel should seek to resume peace talks with the Palestinians despite the establishment of a Hamas-backed unity government; Interior Minister Gideon Saar spoke in favour of maintaining the status quo; Economy Minister Naftali Bennett called for the annexation of parts of the West Bank.

Army radio quoted Defence Minister Moshe Yaalon as calling on "the Arab peoples and leaders of the Palestinian Authority not to reject the extended hand of peace and fraternity".

And Finance Minister Yair Lapid warned that if there was any move to impose Israeli sovereignty in the West Bank he would lead his centrist Yesh Atid party out of government and seek to overthrow it.

"This cannot be how a government's policy is represented," Lieberman told a conference in the southern city of Eilat, in remarks relayed by his spokesman. "We must decide and define one diplomatic programme, which would bind all parts of the government."

Lieberman said he was in favour of an agreement with the Palestinians, but only one that would be part of "a parcel that also solves our relations with the Arab world".

"In the Middle East everyone is afraid of everyone, therefore everyone must be brought to the negotiating table at the same time and do it all in parallel," he said.

"The moderate Arab states are currently dealing with the same threats we are -- Iran, Syria, Al-Qaeda and extremist Islam, and if they want to survive, they must cooperate with us openly," he said.

Lapid made similar remarks on Sunday night, calling for renewed talks with the Palestinians and an effort to normalise relations with moderate Arab nations such as Saudi Arabia and the Gulf states.

Lapid warned that a failure to establish a Palestinian state would lead to demands for a bi-national state.

"If we say yes, we'll cease being a Jewish state. If we say no, we'll cease being a democratic state. Both options are destructive for Israel," he said.

"It is time Israel decided where its borders are."

US-backed peace talks collapsed in late April shortly after Palestinian leaders in the West Bank and Gaza announced a surprise unity deal.

Israel promptly exited the talks, saying it would not negotiate with any government backed by the Islamist Hamas movement, whose charter calls for the destruction of the Jewish state.