ROME, July 10 (Reuters) - Israeli Prime Minister Ehud Olmert said on Tuesday he does not want Palestinians divided into two separate political entities in the West Bank and the Gaza Strip, where the Islamist group Hamas seized control last month. "The solution remains two peoples, two states -- a Palestinian state and a Jewish state," Olmert told Italian newspaper Corriere della Sera during a visit to Israel and the Palestinian territories by Italian Prime Minister Romano Prodi.

"We are not stupid. We don't want to separate Gaza from the West Bank. We know that a million and a half Palestinians live in the Strip. How can they be separated from the others?"

Hamas, which has rejected Western demands to recognise Israel, renounce violence and accept existing Israeli-Palestinian interim peace accords, took over the Gaza Strip last month after routing secular Fatah forces loyal to the West Bank-based President Mahmoud Abbas.

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