Jerusalem Prime Minister Ehud Barak declared Thursday he was prepared to recognize an independent Palestinian state, but said sensitive issues, such as control over Jerusalem, should be set aside for up to three years.
It was the most detailed description yet that Barak has given of his peace proposals, and it was promptly rejected by Palestinian leaders, who said it failed to address their main concerns including control over Jerusalem and the fate of millions of Palestinian refugees.
Two months of violence have derailed peace talks, destroyed Barak's political support and placed Israel on the road to new elections, probably in April or May.
On Thursday, two Palestinians were killed. One was shot to death by Israeli forces during a riot near a refugee camp, according to Palestinians. The Israeli military said soldiers opened fire on armed Palestinians who shot at an army patrol. Outside Bethlehem, a Palestinian was shot and killed and three others wounded in a clash with Israeli troops, witnesses said.
The bloodshed, which has claimed nearly 290 lives, most of them Palestinians, has abated in recent days. However, Palestinian areas remain tense, and previous lulls have been followed by renewed spasms of violence.
Barak has said repeatedly that peace negotiations cannot resume until the violence subsides substantially.