| Israel is proposing new talks with the Palestinians about “an agreement of principles” that could establish a Palestinian state on 90 percent of occupied territory, the Haaretz daily newspaper reported on Wednesday. The Haaretz newspaper said that while Olmert wanted to discuss Palestinian institutions and economic issues with Western-backed Palestinian President Mahmoud Abbas as first stage, he hoped to move on to a discussion of borders. Under the so-called principles the sides could agree to, a Palestinian state could be built on some 90 percent of land in the Gaza Strip and the occupied West Bank, the newspaper said. The sides had discussed a similar deal in peace talks that broke down during violence in 2001. Israel would also propose linking the West Bank to coastal Gaza with a tunnel, and a territorial exchange that would permit the Jewish state to keep major Jewish settlement blocs in the land it captured in a 1967 war, the newspaper said. |