is holding secret negotiations with the American administration in an effort to reach understandings vis-à-vis the establishment of a Palestinian state and its demarcation, the London-based newspaper Al-Sharq al-Awsat reported Friday.
Palestinian sources confirmed that both sides were discussing the option that Israel would lease land in east Jerusalem and the Jordan Valley from the Palestinian state for 40-99 years.
According to one of the sources, the initiative, which he said was "American, not Israeli," has been on the table for a while now "in order to reach common ground with the Israeli side regarding the borders issue and to reach an agreement on what will remain under Israeli sovereignty."
The Prime Minister's Office refused to comment on the report, but Ophir Gendelman, head of the Foreign Ministry's Arabic media department was quoted by the newspaper as saying, "We are conducting intense negotiations with the US administration in an effort to resume direct talks with the Palestinians."
Officials in Washington also refused to confirm or deny the report on the new initiative. A State Department source told the paper that Israel and the US are discussing matters "as a part of the close relations between the two countries."