U.S. downplays report of new Mideast plan

Israeli Foreign Minister Shimon Peres met with U.S. Secretary of State Colin Powell in April in Washington.

JERUSALEM (CNN) -- Israeli Foreign Minister Shimon Peres said Thursday the United States is working on a peace plan that would require the Palestinians to give up the "right of return" for Palestinian refugees in exchange for the evacuation of all Jewish settlements in the Palestinian territories.

"This is something new emerging in the U.S., which says that the Palestinians will give up on the right of return in exchange for Israel giving up on the settlements," Peres said.

However, a senior U.S. official sought to shoot down Peres' comments, saying the Bush administration is "not doing any real thinking on permanent status issues."

The right of return demanded by Palestinians, who either fled or were evacuated from lands that became Israel in 1948, has remained one of the biggest roadblocks to reaching a Middle East peace settlement.

Israel objects to allowing the Palestinians to return to Israel because doing so would create a Palestinian majority -- changing Israel from a Jewish to a Palestinian state.

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The settlements also have become a major issue. Many ultra-Orthodox settlers maintain they have a biblical right to live in the West Bank, which they call Judea and Samaria. The Palestinians have said that the settlers are on the land illegally and the Israeli soldiers who guard them are an occupation force.

Peres told reporters that Israel should re-engage the Palestinians in negotiations and should cooperate with the United States, Russia and the European countries in attempting to reach a settlement.

The Tel Aviv daily Ha'aretz said its diplomatic correspondent had seen a U.S. State Department draft of a regional peace plan that calls for the creation of a Palestinian state with Israel withdrawing to the borders it observed before the 1967 Six Day War.

That plan, it reported, is intended to serve as the political basis for convening a regional peace conference on the Middle East.

But the U.S. official who spoke to CNN called the specificity of the plan detailed in the Israeli newspaper "nonsense" and said there was no draft U.S. peace plan.

He added that planning for an international conference has been slow-going, with no agreements yet on when it would be held, who would attend and what the agenda would be.

"Right now it is little more than a good idea," the official said. "Nothing is determined yet, and I do mean nothing."

Egyptian President Hosni Mubarak is in Washington for talks this weekend with President Bush at Camp David, Maryland. Aides have said Mubarak is expected to argue that Bush should pick a date, probably sometime next year, for the establishment of a Palestinian state.

Israeli Prime Minister Ariel Sharon is scheduled to fly to the United States this weekend and to hold meetings Monday with Bush.

-- CNN State Department Producer Elise Labott contributed to this report.