Outgoing UN Secretary General Kofi Annan said today he was sad to leave office with Palestinian territory still under occupation, and urged a quick return to the peace process.

"It is with great personal sadness that I leave office with the occupation now in its 40th year," Annan said in a speech read by his representative, Angela Kane, at the opening session of a conference in Malaysia on Palestine.

"The situation is more complex, more fragile and more dangerous than it has been for a very long time, and mistrust between Israelis and Palestinians has reached new heights," he said.

Annan, who leaves office at the end of the year, said that the majority of Israelis and Palestinians wanted peace but that "spoilers and rejectionists" on both sides needed to be convinced a solution was possible.

"Most Israelis genuinely believe in peace with the Palestinians," he said.

"Most Palestinians do not seek the destruction of Israel, only the end of occupation and their own state."

Quartet told to work harder

Annan called on the Mideast diplomatic quartet - the European Union, the United States, Russia and the United Nations - to work harder to restore faith in its own effectiveness and in the region's peace roadmap.

The roadmap, which calls for the creation of an independent Palestinian state in the West Bank and Gaza Strip, has stalled since being unveiled by the quartet in 2003.

Foreign Minister Syed Hamid Albar said the UN Security Council had been a "disappointment" for failing to tackle the conflict.

"The Security Council has abdicated its responsibility," Syed Hamid told a news conference.

"Even Kofi Annan recognised in his remarks that he finds that this is one of his failures in his term of office," he said.

"Palestine is the only country in the world where there is a continued colonisation of their state."

Some 285 government officials from mostly Muslim countries are attending the UN's three-day meeting on the rights of the Palestinian people.