The proposal by Zahava Gal-On, chief of the Meretz party, would replace the peace plan laid out in the Oslo Accords, Haaretz reported Tuesday.
"A Palestinian state is an Israeli interest, so Israel must be the first to recognize it and support its acceptance by the U.N.," Gal-On said.
The plan would prevent a unilateral declaration of statehood for Palestine at the United Nations, she said, and would help Israel create a coalition against Iranian nuclear weapons.
Her plan includes several points:
-- Israel would end the occupation based on the 1967 borders with a one-to-one land swap
-- Jerusalem would be divided based on a proposal by former U.S. President Bill Clinton, with Jewish neighborhoods going to Israel and Palestinian neighborhoods going to Palestine. The Holy Basin would receive special status.
-- The Israeli government would declare an immediate freeze on new settlements.
Gal-On's plans calls for talks on the proposal to last for no more than a year, with implementation of the core issues taking no more than four yours.
After a democratic government is elected in Syria, Israel would seek a peace treaty with the country based on returning the Golan Heights and normalizing relations.