Response To The Main Headline In Ha'aretz [copy below]]
Jerusalem, 7 August 2007
Response To The Main Headline In This Morning's Ha'aretz
(Communicated by the Prime Minister's Media Adviser)
Tuesday, 07 August, 2007
In response to the main headline in this morning's Ha'aretz, we do not know
of any plan as described in the article. We would like to clarify that such
a plan has not been considered, nor is it being raised for discussion in any
forum. We express our amazement at this erroneous article, which was
published without any attempt being made to ascertain from us its accuracy.
-----------------

Olmert considers land swap as part of future peace deal
By Akiva Eldar, Barak Ravid and Avi Issacharoff, Haaretz Correspondents and
Agencies Last update - 06:49 07/08/2007
www.haaretz.com/hasen/spages/890566.html

Prime Minister Ehud Olmert is examining a new framework for peace in which
Israel will propose transferring to the Palestinian state areas equivalent
to 100 percent of the territories conquered in 1967.

Israel will suggest to the Palestinians to conduct negotiations for adequate
territorial compensation from Israel's sovereign territory, in exchange for
settlement blocs amounting to about 5 percent of the West Bank's area.

Israel is also examining various options of exchanging settlement blocs with
Arab community blocs within Israel, in agreement with the residents. An
agreement on this issue would enable Yisrael Beiteinu, headed by Avigdor
Lieberman, to remain in the coalition.

The new framework was presented to Olmert by President Shimon Peres, a few
days after he entered the President's Residence. It includes a timetable for
negotiations for the final status agreement and implementing it, similar to
the framework of the Peres-Abu Ala agreement reached at the end of 2001.

Olmert has not yet decided on his position regarding all the plan's clauses,
but apparently has not dismissed its main ideas.

Olmert and Mahmoud Abbas agreed Monday that cooperation between Israel and
the Palestinian Authority would be expanded, in an effort to expedite
progress in their talks for the establishment of the Palestinian state.

"Exchanges between the two sides will become increasingly more substantive,
and will deal less with routine matters," a senior political source in
Jerusalem said Monday.

The three-hour meeting between Olmert and Abbas took place in two parts: a
private meeting just between the leaders, and a lunch with their teams of
advisers.

Sources in the Prime Minister's Bureau said that the atmosphere at the
meeting was constructive.

Saeb Erekat, head of the PLO negotiating team, described Monday's meeting
between Olmert and Abbas as serious and detailed.

"Abbas did not come to the meeting with a magic wand, and neither did Mr.
Olmert," Erekat said at a news conference. "There is an agreement on a
series of meetings to discuss the issues, including the establishment of a
Palestinian state."

Abbas thanked Olmert for the release of 255 Palestinians held in Israeli
prisons, and expressed hope that the next step would result in the freeing
of more prisoners. The two decided to institute a special ministerial
committee, and that the Palestinian Authority will be represented by
Interior Minister Abd al-Razek al-Yihiye.

Israel also promised the Palestinians to reconsider the request of the
militants who were expelled after the siege on the Church of the Nativity in
2002.

"The negotiations on renewing the diplomatic talks between the two sides
have reached fruition," Erekat said Monday. "What we now need is decisions
by the two leaders. We do not need to do anything new for a regional summit,
but to clarify the existing initiatives and the signed agreements. We
support the Arab [League] initiative and the road map as the basis for this
summit."

Erekat also said that the two leaders would hold at least three more
meetings before the November summit in Washington.

Commenting on the Abbas-Olmert meeting, Hamas leader Ismail Haniyeh said
that he did not expect it to produce any results.

After the tete-a-tete, Olmert said he and Abbas discussed issues fundamental
to the establishment of a Palestinian state.

"We have decided to expand the negotiations between us in order to advance
mutual understanding, and formulate the framework that will allow us to move
forward toward establishing a Palestinian state," Olmert said. "Our mutual
goal is to realize the shared vision between us and [U.S. President George]
Bush regarding the establishment of two states for two peoples, who live
side by side in security and peace. We want to achieve this as soon as
possible."

He said he had no intention of stalling.

During the expanded meeting, the Palestinians spoke of the resumed security
cooperation between the Palestinian Authority and Israel. They handed a
document to Olmert and his aides detailing the PA's steps to enhance
security in recent weeks, including the arrest of several members of terror
organizations, and captured munitions and explosives that was handed over to
Israel.