Israel-Palestinian Politics: Israel agrees to negotiate over pre-'67 lines - TV:

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By IAN DEITCH, Associated Press / Aug 1, 9:34 PM EDT.

JERUSALEM (AP) -- In a dramatic policy shift, Israel's prime minister has agreed to negotiate the borders of a Palestinian state based on the cease-fire line that marks off the West Bank, a TV station reported Monday.

Up to now, Benjamin Netanyahu has refused to spell out his plan for negotiating the border. A senior Israeli official would not confirm outright that the prime minister was now willing to adopt the cease-fire line as a starting point, but said Israel was willing to try new formulas to restart peace talks based on a proposal made by President Barack Obama.

In a speech about the Middle East in May, Obama proposed negotiations based on the pre-1967 line with agreed swaps of territory between Israel and a Palestinian state. Netanyahu reacted angrily, insisting that Israel would not withdraw from all of the West Bank, though that was not what Obama proposed.

Now Netanyahu is basically accepting that framework, according to Channel 2 TV, offering to trade Israeli territory on its side of the line for West Bank land where its main settlements are located.

The official, who has been briefed on the talks, spoke on condition of anonymity because the contacts are still in progress. He said he would not deny the TV report, while refusing to confirm the specifics. He emphasized that Israel would not withdraw from all of the West Bank.

"We are willing in a framework of restarting the peace talks to accept a proposal that would contain elements that would be difficult for Israel and we would find very difficult to endorse," he said, answering a question about the Obama proposal.

Part of the reason, he said, was that Israel is seeking to persuade the Palestinians to drop their initiative to win U.N. recognition of their state next month, something the Palestinians are doing out of frustration with stalled peace efforts.

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