Egypt on Thursday rejected Israel's call for Arab states to make peace before the Palestinian issue is solved, saying Israel must accept the land-for-peace formula. Foreign Minister Tzipi Livni had called Wednesday for Arab states to establish diplomatic relations with Israel without waiting for a settlement of the Israeli-Palestinian conflict. She added that Israel would not accept the peace plan known as the Arab peace initiative, saying that its endorsement of the right of return for displaced Palestinians had to be dropped. Egyptian Foreign Minister Ahmed Aboul Gheit told reporters Thursday that Livni's demands would not be well received. "The Arab states will never accept this because the (diplomatic relations) issue is based on the land-for-peace offer. Therefore, the logic of the Arab initiative is that Israel must first withdraw from the occupied Arab lands, there will be an agreement for the Palestinians to establish their state and, parallel to that, peace (with Israel) will be achieved," Aboul Gheit said.