Former Prime Minister Ehud Olmert provided the first detailed account of the offer he made to Palestinian President Mahmoud Abbas on 2008, in an interview with the Australian newspaper published November 28. Here are the key excerpts:

Ehud Olmert still dreams of peace
Greg Sheridan, Foreign editor
The Australian
November 28, 2009

...In Sydney this week, I conducted, perhaps, the longest interview and
discussion Olmert has undertaken with any media since leaving office in
March after more than three years as prime minister...

Olmert's term in office is best remembered for the extensive
negotiations, and final peace offer that he undertook with Abbas.

Olmert explains this position to me in unprecedented detail. His offer to
Abbas represents a historic watershed and poses a serious question. Can the
Palestinian leadership ever accept any offer that an Israeli prime minister
could ever reasonably make?

It is important to get Olmert's full account of this offer on the record:
"From the end of 2006 until the end of 2008 I think I met with Abu Mazen
more often than any Israeli leader has ever met any Arab leader. I met him
more than 35 times. They were intense, serious negotiations." [Note that there was no settlement freeze at the time].

These negotiations took place on two tracks, Olmert says. One was the
meetings with the two leaders and their senior colleagues and aides (among
them Kadima leader Tzipi Livni on Olmert's side). But Olmert would also have
private, one-on-one meetings with Abbas.

"On the 16th of September, 2008, I presented him (Abbas) with a
comprehensive plan. It was based on the following principles.

One, there would be a territorial solution to the conflict on the basis of
the 1967 borders with minor modifications on both sides. Israel will claim
part of the West Bank where there have been demographic changes over the
last 40 years."

This approach by Olmert would have allowed Israel to keep the biggest Jewish
settlement blocks which are mainly now suburbs of Jerusalem, but would
certainly have entailed other settlers having to leave Palestinian territory
and relocate to Israel.

In total, Olmert says, this would have involved Israel claiming about 6.4
per cent of Palestinian territory in the West Bank: "It might be a fraction
more, it might be a fraction less, but in total it would be about 6.4 per
cent. Israel would claim all the Jewish areas of Jerusalem. All the lands
that before 1967 were buffer zones between the two populations would have
been split in half. In return there would be a swap of land (to the
Palestinians) from Israel as it existed before 1967.

"I showed Abu Mazen how this would work to maintain the contiguity of the
Palestinian state. I also proposed a safe passage between the West Bank and
Gaza. It would have been a tunnel fully controlled by the Palestinians but
not under Palestinian sovereignty, otherwise it would have cut the state of
Israel in two.

"No 2 was the issue of Jerusalem. This was a very sensitive, very painful,
soul-searching process. While I firmly believed that historically, and
emotionally, Jerusalem was always the capital of the Jewish people, I was
ready that the city should be shared. Jewish neighbourhoods would be under
Jewish sovereignty,
Arab neighbourhoods would be under Palestinian sovereignty, so it could be
the capital of a Palestinian state.

"Then there was the question of the holy basin within Jerusalem, the sites
that are holy to Jews and Muslims, but not only to them, to Christians as
well. I would never agree to an exclusive Muslim sovereignty over areas that
are religiously important to Jews and Christians. So there would be an area
of no sovereignty, which would be jointly administered by five nations,
Saudi Arabia, Jordan, the Palestinian state, Israel and the United States.

"Third was the issue of Palestinian refugees." This issue has often been a
seeming deal-breaker. The Palestinians insist that all Palestinians who left
Israel - at or near the time of its founding - and all their spouses and
descendants, should be able to return to live in Israel proper. This could
be more than a million people. Olmert, like other Israeli prime ministers,
could never agree to this: "I think Abu Mazen understood there was no chance
Israel would become the homeland of the
Palestinian people. The Palestinian state was to be the homeland of the
Palestinian people. So the question was how the claimed attachment of the
Palestinian refugees to their original places could be recognised without
bringing them in. I told him I would never agree to a right of return.
Instead, we would agree on a humanitarian basis to accept a certain number
every year for five years, on the basis that this would be the end of
conflict and the end of claims. I said to him 1000 per year. I think the
Americans were entirely with me.

"In addition, we talked about creating an international fund that would
compensate Palestinians for their suffering. I was the first Israeli prime
minister to speak of Palestinian suffering and to say that we are not
indifferent to that suffering.

"And four, there were security issues." Olmert says he showed Abbas a map,
which embodied all these plans. Abbas wanted to take the map away. Olmert
agreed, so long as they both signed the map. It was, from Olmert's point of
view, a final offer, not a basis for future negotiation. But Abbas could not
commit. Instead, he said he would come with experts the next day.

"He (Abbas) promised me the next day his adviser would come. But the next
day Saeb Erekat rang my adviser and said we forgot we are going to Amman
today, let's make it next week. I never saw him again."

Olmert believes that, like Camp David a decade earlier, this was an enormous
opportunity lost: "I said 'this is the offer. Sign it and we can immediately
get support from America, from Europe, from all over the world'. I told him
(Abbas) he'd never get anything like this again from an Israeli leader for
50 years. I said to him, 'do you want to keep floating forever - like an
astronaut in space - or do you want a state?'

"To this day we should ask Abu Mazen to respond to this plan. If they (the
Palestinians) say no, there's no point negotiating."