Palestinian Authority Prime Minister Saalam Fayad denied a Yediot Ahronot report on Thursday that the Palestinians and Israel were holding backchannel peace talks - but said the two sides had begun discussing core issues that had held up an accord. "I can't say that we are now negotiating final status issues. But there are beginnings of talks about the fundamental issues that need to be agreed upon to end this conflict," Fayad told the Foreign Press Association, a group that represents some 500 journalists covering Israel and the Palestinian territories for foreign media. Fayad also said the PA government would not call early elections while Gaza is under the control of Hamas. When called, elections will be held in the West Bank and Gaza, and not just the West Bank, Fayad said, apparently hoping to dispel rumors that PA Chairman Mahmoud Abbas planned parliamentary elections that would exclude Gaza. "The current situation doesn't allow us to hold elections, but that doesn't mean we shouldn't think about elections," Fayad said.