DUBAI, March 27 (Reuters) - Libyan leader Muammar Gaddafi, who is shunning an Arab summit this week, accused Arab leaders of wanting to "sell the Palestinians like sheep".

In an interview with Al Jazeera television on Tuesday, he said the summit would only ratify the dictates of U.S. Secretary of State Condoleezza Rice to serve the interests of the "American empire".

The summit, which opens in Riyadh on Wednesday, is set to renew a 2002 Arab offer of normal ties with Israel in return for its withdrawal from all land it seized in 1967 and the creation of a Palestinian state. Israel has rejected the offer.

Gaddafi said the only solution to the Israeli-Palestinian conflict was "a democratic state for the Palestinians and Jews ... This is the fundamental solution otherwise the Jews would be annihilated in the future".

He said the Arab summit would seek to drive a wedge between Sunni and Shi'ite Muslims, to rally Arabs against their Iranian neighbours and to implement U.S. security plans in Iraq that the American people themselves had rejected.

"We know that they (Arab leaders) are in a position of weakness ... The empty chair is an answer to this summit that there is no respect for it," he said. "Libya has turned its back to Arabs ... Libya is an African nation, as for Arabs, may God keep them happy and far away."

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