Marwan Barghouti, the highest ranking Palestinian on trial in Israel for terrorism, defended the past three years of violent intifada yesterday by warning that if Israel failed to deliver independence to the Palestinians it would have to accept Arabs as equal citizens.

The man considered to be Yasser Arafat’s natural successor also accused members of the Israeli government of murdering the former prime minister Yitzhak Rabin in 1996 to kill peace.

Mr Barghouti used his final address to the judges in his trial on 26 counts of murder to defend the past three years of resistance to occupation. The intifada has cost more than 3,000 Israeli and Palestinian lives.

“I am proud of the intifada. I am proud of the resistance to Israeli occupation,” he said.

“To die is better than living under occupation. I am standing here because I resisted Israeli occupation.”

Mr Barghouti, who led the Tanzim - the military wing of the Fatah movement - said: “I hope the Israelis have learned that the Palestinian people can not be brought to yield with force. If an occupation does not end unilaterally or through negotiations then there is only one solution, one state for two people.

“How can the Jews who suffered and survived the Holocaust allow themselves to resort to such insufferable and unacceptable means against another people?”

Mr Barghouti, who is accused of organising suicide bombings and gun attacks, was ambivalent in his rejection of violence against civilians.

“I am against killing innocent people, against murdering innocent women and children. All the time I said I was against military operations but one must fight Israeli occupation in the territories. We are a people like all other people. We want freedom and a state just like the Israelis,” he said.

During his testimony he was given leeway by the judges, who helped him with Hebrew words.

He touched a raw nerve with the Israeli right by accusing it of setting the stage for the murder of Yitzhak Rabin by a Jewish extremist opposed to territorial concessions to the Palestinians.

“The brave man Yitzhak Rabin was murdered. Who murdered Rabin? Those who sit in government now,” he said.

“When Rabin was murdered we also paid the price for the murder.”

Mr Barghouti said Mr Sharon was mistaken if he believed the Israeli cabinet’s threat to exile, or even kill, Mr Arafat would end resistance.

“The Palestinian people will choose its leaders. Yasser Arafat is the leader of the Palestinians and if not Arafat then (the Hamas spiritual leader Sheikh Ahmed)) Yassin and if not Yassin then (Yassin’s deputy, Abdel-Aziz) Rantissi. And if not Rantissi then Barghouti,” he said

Mr Barghouti, who denounced the court as illegitimate and did not take part in most of his trial, taunted the judges and prosecutors by saying that, whatever the verdict, he would walk free as part of a political deal.

The Lebanese Shia group Hizbullah has demanded Mr Barghouti’s release in return for the release of an Israeli businessman held captive and the bodies of three soldiers.

“Put together a commemorative book, because this is history,” he told the prosecutor. “I’ll be out soon enough.”

In marked contrast to Mr Barghouti’s attitude, the former Palestinian security minister Mohammed Dahlan has denounced suicide attacks and other violence against Israeli civilians as “detrimental to our national struggle”.

Mr Dahlan has been sacked from the cabinet of the new Palestinian prime minister, Ahmed Qureia, which is packed with Arafat loyalists. The cabinet is due to be sworn in later this week.

*A civil service strike against the government’s austerity budget closed most public services yesterday and caused long delays at Tel Aviv airport.