The rumor was utterly fabricated. She had actually said that she was never asked to sleep with the enemy..
Nevertheless, within a week the rumor morphed into the accusation that she slept with Saeb Erekat and Yasser Abed Rabbo presumably during the 2007 negotiations.
Now the rumor has resurfaced, by none other than George Galloway, speaking on his Iranian PressTV program, who has added more details: Livni bragged about this in a book she supposedly wrote, and now her victims include "hundreds" of men!
At the YouTube link you can see videos of Galloway's alleged ex-lovers talking about his hypocrisy and lies.
(h/t Ibn Boutros)
UPDATE: BillPoser in the comments says:
This is great! The moron said it in England, which has nasty libel laws. And in English common law, impugning a woman's chastity is defamatory per se. She can nail Galloway to the wall in court.
Anyone want to call Shurat HaDin?