Ehud Olmert plans to offer the Palestinians a state on most of the West Bank, with land allotments from Israel to make up for Jewish settlement blocs Israel would annex, Ha’aretz reported.

Tuesday’s report said the Israeli prime minister wants to recognize the Palestinians’ claim to all of the West Bank, but instead of giving up on Jewish settlements situated in the territory intends to offer the Palestinians land of equivalent size from within the Jewish state. This land could consist of Israeli Arab towns, an ethnic trade-off aimed at mollifying Olmert’s rightist partners in the coalition government, the report said.

The Prime Minister’s Office denied the report, saying in a statement: “We would like to clarify that such a plan has not been considered, nor is it being raised for discussion in

The report, which followed Olmert’s summit Monday with Palestinian Authority President Mahmoud Abbas, stirred outrage among Israeli Arabs.

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