JERUSALEM - Israeli leaders are seriously considering a dormant Saudi plan offering a comprehensive peace between Israel and the Arab world in exchange for lands captured during the 1967 war, Defense Minister Ehud Barak said Sunday. Barak said it may be time to pursue an overall peace deal for the region since individual negotiations with Syria and the Palestinians have made little progress. Barak said he has discussed the Saudi plan with Prime Minister-designate Tzipi Livni, who is in the process of forming a new Israeli government, and that Israel is considering a response.

Saudi Arabia (web|news) first proposed the peace initiative in 2002, offering pan-Arab recognition of Israel in exchange for Israel's withdrawal from Arab lands captured in 1967 - the West Bank, Gaza Strip, east Jerusalem and the Golan Heights.

The 22-member Arab League endorsed the plan last year.

Israel has said the plan is a good basis for discussion, but expressed some reservations.

"There is definitely room to introduce a comprehensive Israeli plan to counter the Saudi plan that would be the basis for a discussion on overall regional peace," Barak told Israel's Army Radio.

He noted the "deep, joint interest" with moderate Arab leaders in containing Iran's nuclear ambitions and limiting the influence of Hezbollah in Lebanon and Hamas in Gaza.

While Israel's outgoing prime minister, Ehud Olmert, has welcomed the Saudi plan, he and other leaders want to keep small parts of the territories captured in 1967. Israel also objects to language that appears to endorse a large-scale return of Palestinian refugees to lands inside Israel. Israel says a massive influx of Palestinians would destroy the country's Jewish character.

Israel's ceremonial president, Shimon Peres, proposed putting Israel's various peace talks on one track last month at the United Nations, calling on Saudi King Abdullah to "further his initiative." He has since been pushing the idea in meeting with Israeli, Arab and Western officials, his office said.

While Peres has no formal role in Israeli foreign policy, he is a Nobel peace laureate and well respected in the international community.

In Sunday's interview, Barak said he was in full agreement with Peres.

"I had the impression that there is indeed an openness to explore any path, including this one," he said of his talks with Livni.

Barak, who leads the Labor Party, is expected to play a senior role in the next administration.

Livni's office refused to comment on her talks with Barak.

Palestinian negotiator Saeb Erekat noted that pursuing the Saudi peace initiative did not necessarily undermine the direct talks between Israel and the Palestinians and he encouraged Israel to pursue this track.

"I think Israel should have done this since 2002. It is the most strategic initiative that came from the Arab world since 1948," he said. "I urge them to revisit this initiative and to go with it because it will shorten the way to peace."

Written By ARON HELLER

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