The Palestinians are also considering their response and are consulting with Arab leaders.
An Israeli government official said he believed the Egyptians are looking at the proposals favorably. Prime Minister Ehud Barak is expected to discuss the matter with Egyptian President Hosni Mubarak, who is believed to wield considerable influence over the Palestinian leader, Yasser Arafat.
U.S. President Bill Clinton had presented his outline of principles for a settlement to both sides at a joint meeting on Saturday. Clinton had asked for a response by Wednesday, but a U.S. source indicated the deadline has been postponed to the weekend.
Israeli Foreign Minister Shlomo Ben-Ami said the proposals put an end to Palestinian demands for a right of return for their refugees. The United Nations estimates there are some 3.5 million refugees.
"There cannot be a right of return to the state of Israel," Ben-Ami said. "This is being anchored in this package."
As far as the agreement is concerned, Israel will have the sovereignty to decide "whether to accept or not to accept people who come to its doorstep. For this matter it is no different than Australia," he added in an interview on Channel 1 TV.
Ben-Ami said a reasonable settlement requires statements on an "end to the dispute" and "an end of claims." The proposed package "requires this," he added.
The bitterest pill for Israelis, in the U.S.-proposed guidelines, concerns the future of the Temple Mount. The Temple Mount is Judaism's holiest site. Jews all over the world pray toward it and are not allowed to step in parts of it. But it is also the third-holiest site in Islam. The Muslims call it Haram e-Sharif and have four mosques there.
Ben-Ami tacitly confirmed Israel will not have sovereignty over the mount's surface, but did not say who will. However, he did say Israel was demanding sovereignty over the area inside the mount.
"That is where the Holy of Holies is," he said, referring to the holiest section in the First and Second Jewish Temples. According to Jewish tradition, the Holy of Holies contained the tabernacles with the Ten Commandments.
"There will be no agreement without it," he stressed.
Ben-Ami defended the division of the rest of East Jerusalem, including the Old City. It will be an open city, with free access, he said.
"We are talking about a separation of populations, not territory; a separation of authority, not a wall running through the heart of the city. And we are talking first and foremost about a Jewish Jerusalem, the biggest in history."
The foreign minister said it would include a string of towns Israel had built around Jerusalem from Givat Zeev, northeast of Jerusalem, to Maale Adumim in the southeast and 11 Jewish neighborhoods that the Palestinians and the world consider settlements.
Ben-Ami was still hard-pressed to defend Jerusalem's division, breaking away from past government declarations that Jerusalem the city shall be united, under Israeli sovereignty, for eternity.
The foreign minister indicated it was time to face realities.
The foreign minister said Israel seeks international safeguards and very stringent control mechanisms that would "make it impossible to move anything without mutual consent. This is something that is anchored and will be properly anchored," he added.
Ben-Ami said Israel seeks also "international forces that would protect the Jordanian border."
Originally Israel wanted its own forces deployed in the Jordan Valley to protect the eastern front, and Ben-Ami's comments indicated readiness to have foreign troops there instead. He said the Israeli army would supervise the border crossings for a long transitional period.
Earlier, Justice Minister Yossi Beilin said an agreement, if reached, would only be initialed and would not be binding until Parliament or a referendum approves it. It will thus be "a potential undertaking," Beilin said. He, too, favored the proposals.
However, the opposition Likud leader and candidate for prime minister, Ariel Sharon, slammed the proposals.
"You cannot divide Jerusalem and give up the Temple Mount, the holiest site for the Jewish people," he said.
Sharon said he nevertheless realized there would be painful concessions.
"In peace, you make painful concessions," he said in the Channel 1 TV interview. However, if he is prime minister and current public opinion polls suggest he will be he will not make concessions in Jerusalem or let Palestinian refugees return.
Sharon warned the more hardened nationalists not to press too much. "Twice they toppled [Likud] governments and got much worse governments," he said. He was referring to the hard-line Prime Minister Yitzhak Shamir, who lost to Yitzhak Rabin and Shimon Peres, who then signed the Oslo accords, and Binyamin Netanyahu who last year lost to Barak.
Likud leaders have been arguing that Barak has no right to negotiate concessions after having resigned, running for new elections scheduled for Feb. 6, and having the backing of only 30 members in the 120-seat Parliament.
The Likud's former finance minister, Meir Shetrit, said Israel must tell the Arabs: "Forget about Jerusalem. It is our capital, not since Camp David, but since King David, and it is indivisible."
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