MIDDLE EAST:Prime minister Ehud Olmert's deputy said yesterday that Israel should be prepared for negotiations with the Palestinians over partitioning Jerusalem and ceding authority over some of its holiest sites.
Vice-premier Haim Ramon made the comments as Israeli and Palestinian negotiators opened talks at a secret location in Israel over a joint document they hoped to present at a US-sponsored conference on Palestinian statehood.
Nabil Abu Rdainah, an aide to Palestinian President Mahmoud Abbas, said that the talks are meant to chart a course toward comprehensive peace. Diplomatic failure, he said, could "drown the region in violence".
Mr Ramon's public comments on one of the most sensitive issues in the conflict have stoked speculation he is trailing an initiative on behalf of Olmert ahead of the international gathering expected to take place in Annapolis, Maryland, USA.
Mr Ramon told Israel Radio: "Wouldn't it be the right deal today for the Palestinians, the western world and the international community to recognise [ Israel's] annexation of . . . [Jewish] neighbourhoods as part of Jerusalem, and for us to quit the Arab neighbourhoods."
He said talk of ceding control over holy sites in Jerusalem's Old City, which he referred to as the "holy basin", was premature for now.
But Mr Ramon added: "We need to say there will be a special regime in the 'holy basin', which we will talk about in the future." Mr Olmert and Mr Abbas agreed last week the joint document would be the basis for final-status negotiations that would begin after the conference in mid-to-late November.
Final-status talks - over the borders of a future Palestinian state and the fate of Jerusalem and millions of Palestinian refugees - collapsed in early 2001 amid violence.
Mr Abbas wants to present any deal before the Palestinian people in a referendum. However, it is unclear how this could be achieved with his Fatah faction controlling only the occupied West Bank after Hamas Islamists seized the Gaza Strip in June.
Mr Ramon is one of Olmert's closest confidants, but the prime minister, weakened by corruption scandals and last year's Lebanon war, has not committed publicly to his deputy's ideas.
Meanwhile, Mr Olmert has sought to lower expectations for the conference, seeking a joint statement to deflect pressure from coalition partners who oppose dividing Jerusalem and making moves to bolster Mr Abbas, who wants a more detailed document.
Strategic affairs minister Avigdor Lieberman, the leading far-right member of Mr Olmert's centrist coalition government, said he was prepared to trade some Palestinian areas within Jerusalem for Jewish settlement blocs in the occupied West Bank. But he ruled out dividing or ceding authority over the Old City.
Mr Ramon said Mr Olmert's government would not accept a formal "right to return" for Palestinian refugees to what is now Israel. But he said some Palestinians could request permission to return to Israel "on the basis of charity and mercy".