Report says EU has Mideast peace plan

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JERUSALEM, Jan. 13 (UPI) -- The European Union is preparing a peace plan that would result in a Palestinian State with east Jerusalem as its capital, sources told Yedioth Ahronoth.

The EU intends to present the plan to Israel and the Palestinians in March in an effort to force the sides to return to the negotiating table and reach a peace agreement, the newspaper reported Sunday.

The plan calls for the formation of an independent Palestinian state based on 1967 borders, with east Jerusalem as its capital, and also calls for land swaps and a demand that Israel freeze all settlement construction, the newspaper said.

"The Europeans cannot force an agreement upon us, but they can embarrass us. They are currently putting together a document that stipulates the parameters for a future peace plan which they will place on the table as a challenge. It is possible the Palestinians will accept such a plan, but for Israel it will be difficult. It will push us into a corner," an unnamed Israeli government official told the newspaper.

Foreign ministers from England and France are the driving force behind the plan that also has Germany's support and is currently being examined by EU Foreign Policy chief Catherine Ashton, who intends to turn it into a binding document, the paper said.

European officials are consulting with U.S. officials on the subject, but agreed to an American request to hold back on publishing the plan until after Israel's general elections Jan.22. The plan was also raised by European Union officials during a visit to Amman, Jordan last week.

Europeans were also studying the possibility of organizing a regional conference with the participation of Israel, the Palestinians, Egypt, Jordan and the Gulf countries, where the peace plan would be discussed. If Israel refuses to participate in such a convention, it would be viewed as a refusal to seek peace, the newspaper said. The Palestinians have already told the Europeans they were ready to participate.