JERUSALEM - A key ally of Prime Minister Ehud Olmert said yesterday that Israel will hold on to all Jewish neighborhoods of Jerusalem but would have to relinquish Arab neighborhoods in a peace agreement with the Palestinians.
The comments by Vice Premier Haim Ramon appeared aimed at defusing US criticism of an Israeli plan to expand one of its Jewish neighborhoods in East Jerusalem, the section Palestinians claim as capital of a future state.
Israeli-Palestinian peace negotiations are set to resume Wednesday under an agreement reached at last month's Mideast peace conference in Annapolis, Md.
A senior Palestinian official asserted yesterday that Israel is already negotiating in bad faith over Jerusalem, one of the touchiest issues on the table.
"These statements place obstacles before any serious attempts by Palestinian negotiators on Jerusalem," said the Palestinian foreign minister, Riad Malki. "They aim to create confusion and change the course of negotiations before they begin. They try to pressure Palestinians and the international parties to think of Israeli needs before they begin."
Despite official opposition, some Palestinians have indicated that they would consider a division along the lines Ramon described.
In 2003, some leading moderates signed on to an unofficial plan that includes such a concept.
Altogether, about 500,000 Jews and 230,000 Arabs live inside Jerusalem's expanded boundaries, set by Israel in 1967 after it captured the eastern part of the city.
Ramon, who often speaks for Olmert, said Har Homa, the newest Jewish neighborhood, would remain Israeli, along with the older ones where about 180,000 Israelis live.
Last week, Israel published ads seeking bids from developers to build 307 additional housing units in Har Homa, triggering protests from the Palestinians and US Secretary of State Condoleezza Rice, who said the new apartments would not "help to build confidence" for new peace talks.
"The Jewish neighborhoods, including Har Homa, will remain under Israeli sovereignty, and the Arab neighborhoods will be the Palestinian capital, which they will call Jerusalem or whatever they want," Ramon said in an interview on Israel Radio. "Then we won't get embroiled, as is happening now, in an uncalled-for and badly timed debate with the United States, at a time when we need its support."
Ramon explained that if Israel does not relinquish control of heavily populated Palestinian areas, its character as a Jewish state will be undermined.
Ramon's formula - retaining Jerusalem's Jewish neighborhoods and giving Arab sections to the Palestinian state - is similar to one presented by President Clinton and discussed at the last round of peace talks in January 2001.
Ramon first referred to the concept several months ago.
Those talks ended inconclusively as Israeli forces fought Palestinian militants at the beginning of the second Palestinian uprising, marked by bloody Palestinian suicide bombings in Israeli cities and punishing Israeli raids in the West Bank and Gaza.
Israel captured East Jerusalem in the 1967 Mideast war.