Asharq al-Awsat reports that the US and Israel are in secret negotiations in Washington to define the borders between Israel and a future Palestinian Arab state.
According to the sources, the agreement that the US is pushing involves recognition of a Palestinian Arab state exactly along the 1949 armistice lines in return for Palestinian Arab agreement to lease parts of "Arab" eastern Jerusalem and the Jordan Valley to Israel for somewhere between 40 and 99 years.
This is an American proposal, coming in response to Israeli insistence that the US adhere to the letter that George W. Bush sent to Ariel Sharon that large settlement blocs would remain under Israeli control.
The sources said that the idea of leasing land was floated during the 2001 Taba negotiations, but for 6-9 years and not for many decades.
The US and Israel declined to confirm or deny the report. A State Department spokesman said "We are in constant contact with Israel. This is part of our strong and solid commitment [to the peace process.] Some are public communications, and some are private, and of course we do not announce non-public communications."