Palestinian President Mahmoud Abbas rejected an Israeli peace proposal because it did not provide for a contiguous Palestinian state with Jerusalem as its capital, Abbas’ office said Tuesday.

Nabil Abu Rdainah, Abbas’ spokesman, told the official Palestinian WAFA news agency Israeli Premier Ehud Olmert’s plan showed a “lack of seriousness.”

Olmert’s proposal does not offer a solution to competing claims to the holy city of Jerusalem, and would only be implemented once Abbas reined in militants and re-established control of Gaza, which Hamas seized a year ago.

Under the proposal, Israel would return to the Palestinians some 92.7 percent of occupied West Bank territory, plus all of the Gaza Strip, according to Western and Palestinian officials briefed on the negotiations.

In exchange for West Bank land that Israel would keep, Olmert proposed a 5.3 percent land swap giving the Palestinians a desert territory adjacent to the Gaza Strip.

Olmert’s proposal first emerged several months ago and was published in detail on Tuesday by Israel’s left-leaning Haaretz newspaper, prompting Abu Rdainah’s response.

“The Israeli proposal is not acceptable,” he said. “The Palestinian side will only accept a Palestinian state with territorial continuity, with holy Jerusalem as its capital, without settlements, and on the June 4, 1967 boundaries.”

He called the Israeli proposal a “waste of time.”

Further, Abbas would only receive the land and the overland connection once his forces retake the Gaza Strip from the Islamist Hamas movement, which seized power in the coastal territory in June, 2007, the Haaretz report said.

Palestinian negotiator Saeb Erakat earlier said the report was “baseless.”

“These are half-truths used by Israelis as a test balloon so they can blame the Palestinian Authority should the negotiations fail,” Erakat told AFP.

Launched in November with the goal of reaching a statehood deal in 2008, the US-sponsored talks have shown little outward sign of progress and have been marred from the start by violence and disputes over Israeli settlement building.

The chances of a peace deal faded further with Olmert’s announcement last month that he would step down as premier once his Kadima party chooses a new leader in September.

Olmert spokesman Mark Regev said the prime minister was serious about continuing the peace talks.

But another Israeli official said Olmert was trying to establish his legacy. “There is going to be no agreement, period,” he said on condition of anonymity.

The agreement proposed by Olmert, indeed, would be a “shelf agreement” to be implemented in the coming months and years, and would not immediately include the thorny issue of the future status of Jerusalem, Haaretz said.

The Palestinians have demanded Arab East Jerusalem, which Israel occupied and annexed in the 1967 Six Day War, as their capital, while Israel considers the entire Holy City its “eternal, undivided” capital – a claim not recognized by the international community.

The agreement would however include a complex solution to the Palestinian refugee problem, allowing some refugees from the 1948 war to return to Israel while settling most of the 4.5 million refugees and their descendants in Palestine.

The 7 percent of the West Bank annexed by Israel would include the major settlement blocs around Jerusalem – home to most of the 250,000 Israeli settlers in the territory — and some settlements in the northern West Bank.

The final Palestinian state would be demilitarized.

Erakat dismissed the idea of a partial agreement. “We are not a bazaar,” he said. “We want a complete Israeli withdrawal from the territories it occupied in 1967, including Jerusale and agreement on all the final status questions,” he added.

Olmert’s spokesman Mark Regev declined to comment on the report but said the “negotiations with the Palestinians are making progress on a number of subjects, particularly borders.

“These negotiations are serious and are aimed at a common objective,” he added.

Meanwhile Tuesday, an official said Israel will expand a Jewish enclave in the West Bank to absorb dozens of settlers listed for eviction from an outpost built six years ago without government authorization.

The US-sponsored “road map” for peace, reaffirmed at an Annapolis summit last year, calls for Israel to freeze all settlement activity on land Palestinians want for a state.

Israel has continued to expand settlements it intends to hold onto as part of a peace deal, but says it will not build new enclaves in land it captured in a 1967 war or confiscate more Palestinian land for settlers.

Israel’s Defense Ministry, seeking to avoid violent confrontations with settlers vowing to resist evacuation from the Migron outpost near Ramallah, has agreed to move them peacefully to another enclave.

A ministry official denied to Reuters Israel had agreed to build a new settlement for the 40 families living in Migron, but said “an agreement in principle” was reached to expand an existing settlement to absorb them.

Ishai Hollander, spokesman for the settlers’ YESHA council, said on Monday that the Defense Ministry had proposed building a new settlement near Migron for those listed for evacuation. The ministry initially declined to comment.

Israel’s high court had given the ministry until this month to present a plan for removal of the outpost, built without government authorization on privately owned Palestinian land.

The official said the settlers would not be moved until new homes had been built elsewhere, which could take months.

Migron is one of the biggest of dozens of outposts that Israel itself considers unlawful, while the Palestinians have already accused Israel of bad faith during the nine-month-old Annapolis peace process for approving the expansion of other settlements.

From The Daily Star