Israeli Labor party eyes Jerusalem partition plan

Jerusalem (Agence France-Presse): In a bold move likely to stir up feelings over Jerusalem, Israel's Labor party, facing an uphill battle in January elections, said on Sunday it would be ready to renounce Israeli claims on the annexed eastern sector of the disputed holy city.

Meanwhile the governing right-wing Likud, which has seen its lead shrink but is still tipped to win the general elections, faces a police inquiry into allegations of corruption during its own internal leadership polls last month.

Labor's secretary general Ofer Pines said his ailing party was ready to give up the Jewish state's claim to Arab districts of Jerusalem annexed after the eastern part of the city was seized by Israeli forces in the 1967 Middle East War.

"We want Jerusalem to become a city where one can live a normal life and the annexed Arab neighborhoods are not part of the city. This measure was taken to enlarge Jerusalem," Pines told public radio.

"To manage to have the Jewish part recognized as the eternal capital of Israel by the whole world, in return for a renunciation of the Arab areas and as a way to peace, that would be the best news possible for the people of Israel," he said.

Israel has built dozens of Jewish neighborhoods in the disputed east of the city since taking it over in the 1967 Six-Day War.

But the annexation has never been recognized by the international community, with almost all states keeping their embassies in Tel Aviv.

During Israeli-Palestinian peace talks in the United States in July 2000, then U.S. president Bill Clinton proposed a compromise formula on Jerusalem whereby Jewish areas of the city would remain under Israeli sovereignty while Arab quarters would become the capital of a future Palestinian state.

The talks however broke down on the question of Jerusalem, with sovereignty over the Old City's Muslim and Jewish holy sites the main sticking point.

Separately, Prime Minister Ariel Sharon said that his forces will remain in Bethlehem during Christmas celebrations and Arafat will not be allowed to attend midnight mass in the West Bank city.

"Mr Sharon said during the weekly cabinet meeting that the Israeli army will stay in Bethlehem during the Christmas celebrations to ensure security, and that it would not permit Yasser-Arafat to take part in the religious ceremonies," a senior Israeli official told AFP on Sunday.