At a summit meeting of Arab states, held in Beirut, Lebanon, in March 2002, Crown Prince Abdullah of Saudi Arabia proposed a a peace initiative, adopted by the members of the Arab League, that calls for Arab countries to all pledge to accept Israel as their neighbor and establish normal relations with Israel, if it meets following three demands:

• Israel's withdrawal from all occupied Arab territories.
• Creation of a Palestinian state, with its capital in East Jerusalem.
• The right of return of Palestinian refugees to Israel.

Israeli Prime Minister Ariel Sharon reportedly came to Washington, DC, at the beginning of May with a new peace plan. Unfortunately, his trip to the US was cut short by a terrorist bombing at a pool hall in Rishon LeZion. Various media reports indicate that the following points were included in the Israeli peace proposal:

• Israel will attend a regional or international conference, at the foreign minister level, that would lead to a series of long-term interim agreements, followed by negotiations for a final settlement.
• Israel will agree to a Palestinian state at the end of an interim period of quiet and restructuring as long as Arafat was no longer in power. Borders would be subject to negotiation.
• Israel will erect physical buffer zones to separate the Palestinians from the Israelis.
• Israel will halt military action against the Palestinian Authority if terrorist attacks cease.
• Israel will leave intact all the Jewish settlements, at least through the end of a protracted interim period.

The purported plan also calls for:

• The Palestinian Authority to be rebuilt and its institutions revamped to stamp out corruption.
• The Palestinian Authority to streamline its security forces under one senior officer, while becoming more democratic.
• The Palestinian Authority’s financial administration to become "transparent," so it cannot divert funds for what the Israel government sees as terrorism.

The Saudi initiative would provide Israel not only with recognition of its existence and right to live in peace, but also would establish full normalization of relations among the Arab nations and Israel. According to some analyses, the offers are a strategic change in Arab thought and a new foundation in the official Arab position. It is now the time when a serious, responsible opposition movement in the Knesset should pick up the Arab gauntlet and place it at the top of the political agenda, they say. However, others point out that the proposal needs clarification on matters such as a solution to the problem of Palestinian refugees, concessions the Palestinians will be ready to make on Jerusalem and the Moslem holy places there, the stages in implementation of a peace plan, and the overall implementation of any initiative. Without these details, the plan may not get buy-in from all the Arab countries involved. Those Israelis opposing the Saudi plan feel that it leaves too much up in the air, threatens Israeli security, and requires too many concessions from Israel and her citizens.

Many Israelis also feel that the current Israeli government is talking less about a formal peace proposal than a set of ideas designed to restore confidence and produce a long-term interim settlement -- in the hope that appropriate conditions can then be created, gradually, for eventual final status talks.

In addition to Prime Minister Sharon’s plan outlined above, there are several other Israeli peace proposals being formulated, including one by Benjamin “Faoud” Ben Eliezer, the Israeli Defense Minister and head of the Labor Party. Even though Prime Minister Sharon’s Likud Party has adopted a resolution saying that "no Palestinian state will be established west of the Jordan River,” the prime minister has said that he would "continue to lead Israel and the people of Israel according to those considerations that have always guided me - the security of Israel and its citizens and the common ambition for true peace.” Sharon has stated publicly on several occasions that, given the proper circumstances, the Palestinians would get a state. Peace is possible, according to the Prime Minister, on two conditions - a complete halt to the terror, violence and incitement; and internal reforms (on security, the economy, the legal system and within society) by the Palestinian Authority.