The Palestinian president, Mahmoud Abbas, says Israel’s plan to impose its final borders deep inside the occupied territories while expropriating large areas of Palestinian land for Jewish settlers will lead to another war in a decade.

Speaking in Gaza City as Israel dropped scores of artillery shells in and around the city, Mr Abbas told the Guardian that the newly elected Israeli prime minister, Ehud Olmert, would jeopardise the possibility of long-term peace if he refused to negotiate an agreement that ordinary Palestinians considered just.

"The Israelis say: ‘OK, we’ll impose a unilateral solution’ – which means that they will postpone, delay, the struggle and they will not solve the problem. OK, they can postpone it for 10 years. After 10 years our sons will feel it is unfair and they will return back to struggle," Mr Abbas said in a rare interview with several European and North American newspapers.

"In Gaza they evacuated the settlements and left Gaza. But in the West Bank they will demarcate the borders and say: ‘This is your state.’ And they want our state within the wall without negotiations … Nobody will accept it. The struggle will continue."

Mr Olmert, who is forming a new coalition after his Kadima party’s victory in last week’s election, has said he is prepared to negotiate. But he claims that Hamas’s rise to power means there is "no partner for peace", and therefore Israel will draw its borders by 2010 using the West Bank barrier to mark out a frontier and annex the main settlement blocks. Some Israeli cabinet minister’s have gone further. The foreign minister, Tzipi Livni, described Mr Abbas, who was directly elected last year, as "irrelevant" since Hamas took power and turned the Palestinian Authority into a "terrorist authority".

In what some Palestinians see as a demonstration of disdain, Israel maintained a steady barrage of shelling against Gaza during Mr Abbas’s visit to the territory this week, dropping explosives close to his presidential compound as he slept yesterday. In recent days shells have destroyed Mr Abbas’s helicopter pad, a Fifa-funded football ground and several buildings. On Thursday alone, Israel fired more than 300 shells into Gaza in response to three Palestinian rockets.

The Palestinian president said he feared Israel might try to isolate him in the same way his predecessor, Yasser Arafat, was cut off and unable to travel, as a pretext for refusing to negotiate. "I’m afraid they’ll boycott me and they will not deal with me, which means I cannot do anything, cannot move here and there. It’s up to them but I advise them not to do it because we still insist that we should reach an agreement with the Israelis. [But] they have the upper hand. They can say: ‘OK, you cannot move’."

Mr Abbas portrays himself as a vital bridge to the west as Hamas fumbles its way toward meeting demands that it renounce violence and recognise Israel if it wants foreign aid to continue. The Palestinian president has the backing of the US secretary of state, Condoleezza Rice – although not of some others in Washington – and of the Europeans.

Mr Abbas said the pressure on Hamas, which took control of the Palestinian government last week, was beginning to tell. He noted disarray among Hamas cabinet ministers over the recognition of Israel, and a gradual retreat from its previous hard line. In recent days, the foreign minister, Mahmoud Zahar, said Hamas remained dedicated to eradicating the Jewish state while also writing to the UN secretary general, Kofi Annan, and speaking of a two-state solution. He backtracked when the letter was made public.

"You may notice some confusion in their political positions. That was clear from Zahar’s letter to Kofi Annan," said Mr Abbas. "If Hamas do not change, nobody will deal with them … They came to understand it. In the beginning, during the elections, they had some illusions that they can deliver, they can survive without help: let the world go to hell. But they started realising that this is not do-able.

"But they are only one week in office, so let us wait. It needs time."

Hamas declared this week that the PA’s coffers were empty and that it may not be able to pay its 130,000 workers this month. Mr Abbas appealed to foreign governments not to cut off aid.

On Monday, European foreign ministers are likely to confirm that direct funding for the authority will be temporarily suspended but an effort will be made to keep some funds flowing by extending the definition of "humanitarian assistance" to include healthcare workers, doctors, nurses and teachers.

"It’s not acceptable to punish the Palestinian people," Mr Abbas said. "We cannot say to the Palestinians: ‘it’s good being democratic and at the same time we punish you’. The EU must find a mechanism to get aid to the people. Some suggest channelling aid through the presidency, some say through the World Bank. But right now there are no clear options."

Mr Abbas said that, like Hamas, Israel would eventually be forced to face reality and negotiate. "Nobody can force them but their interests, their concerns, should force them to deal with us … If we solve the problem … it is for the benefit of the Israelis themselves and for the Palestinians. If they give us our rights, and they have their rights, why not?"