CAIRO, Nov. 25 (Xinhua) -- Arab League (AL) chief Amr Moussa on Saturday welcomed proposal by exiled Hamas chief Khaled Meshaal to establish a Palestinian state based on the 1967 borders in six months.

    "Meshaal's proposal is in line with the basics of the Arab peace initiative," Moussa said in a statement after meeting with Meshaal at the AL headquarters here.

    Visiting exiled Hamas leader Khaled Meshaal warned earlier Saturday that the Palestinian authorities could collapse and there would be a third intifada (uprising) if the international community couldn't work out a political solution to a Palestinian state based on the 1967 borders within six months.

    Moussa said the proposal "is very important", noting that the Hamas official underlined the need to have a time ceiling for the proposal to flesh out.

    "The timeframe is very important. Previous failures were due to the lack of timeframes," Moussa said.

    For his part, Meshaal said Palestinians are capable of achieving their demand of establishing a state, adding that "we can achieve this with Arab and Muslim support and we expect that we can reap the fruit of our efforts".

    On breaking the siege imposed on the Palestinians, Moussa said that it has already been broken with 30 million U.S. dollars from Kuwait arriving in the Palestinian Authority (PA) coffers.

    Contacts are continuing with Arab countries to send agreed sums of money to the Palestinians, he added.

    Meshaal, who is now in exile in Syria, said Arab countries are committed to paying 52 million dollars every month to the Palestinian Authority.

    "The Palestinians must restore their rights or else chaos would be rampant in the region and the PA might disappear altogether," he said.

    Regarding the recognition of Israel, Moussa said recognition should be mutual.