JERUSALEM (AP) -- Why does it matter?
Resolving the Israeli-Palestinian conflict would remove a major source of instability in the Middle East, reduce the risk of war there and improve U.S. ties with the Arab and Muslim world. A peace deal, to be endorsed by 57 Muslim and Arab nations, would end Israel's isolation in the region and boost its international legitimacy. It would allow millions of Palestinians to determine their fate in a state of their own, after decades of living under Israeli military occupation.
What's the goal?
Negotiators are trying to work out the terms of a Palestinian state next to Israel, including its borders and security arrangements, as well as come up with a solution for some five million descendants of Palestinians who fled or were driven out in the war over Israel's 1948 creation.
What do the Palestinians want?
The Palestinians seek a state in the West Bank, Gaza and east Jerusalem, lands Israel captured in the 1967 Mideast war. The Palestinians want to establish their capital in east Jerusalem. They have said in previous rounds that they are willing to swap some West Bank land for an equal amount of Israeli territory. This would enable Israel to annex some of the dozens of settlements it has built since 1967. Palestinian President Mahmoud Abbas has proposed to trade 1.9 percent of the West Bank.
What does Israel want?
Israeli Prime Minister Benjamin Netanyahu's predecessor, Ehud Olmert, offered a land swap of 6.5 percent to Abbas before talks broke down in 2008. Netanyahu never made a detailed proposal of his own, but has said he won't give up east Jerusalem and wants to keep Israel's large "settlement blocs," all but one relatively close to Israel's 1967 frontier. In any border deal acceptable to the Palestinians, Israel would have to move tens of thousands of the West Bank's 360,000 settlers from their homes, a decision that would encounter stiff opposition in Netanyahu's party and coalition.
What are the biggest sticking points?
The toughest issues are dividing Jerusalem and resettling Palestinian refugees.
East Jerusalem has become a tangle of Arab and Jewish areas, particularly after Israel built large settlements for 200,000 Jews, and drawing a border between an Israeli and a Palestinian capital in Jerusalem poses a major challenge. The two sides would also need to come up with creative arrangements in east Jerusalem's Old City, home to major holy sites of Judaism, Christianity and Islam, to accommodate the world's billions of followers of the three religions.
Abbas wants Israel to recognize, at least in principle, that Palestinian refugees have a "right of return" to homes in what is now Israel, but has signaled flexibility. Still, he hasn't prepared the Palestinian public for major concessions he'll likely have to make on the issue, including resettling most refugees in a Palestinian state. In Israel, there is wall-to-wall consensus that most refugees won't be able to return because that would dilute Israel's Jewish majority.
What would a deal look like?
In more than two decades of talks, the outlines of a deal have emerged. This would likely include a land swap of several percentage points, a partition of Jerusalem based on ethnicity and a resettlement of most refugees in a future Palestine. In recent years, warnings have mounted that such a deal is no longer possible because of the continued expansion of Jewish settlements, and the new round of negotiations is widely seen as the last chance for a deal.
What are the alternatives?
Israel could withdraw unilaterally behind its heavily fortified West Bank separation barrier, which would leave east Jerusalem and large settlements on the "Israeli side" of such a frontier. This would require giving up land and uprooting tens of thousands of settlers without getting peace in return, but would boost Israeli security in the short term.
Israel could continue the status quo, including expanding settlements. This would make future partition impossible, deepen Israel's international isolation and lead Israel toward an unwanted bi-national state where Palestinians will one day make up a majority because of a higher birth rate.
Who is opposed to a deal?
The Islamic militant Hamas which overran Gaza two years after Israel withdrew from the territory in 2005 wants to set up an Islamic state in all of historic Palestine, including what is now Israel. Hamas, which fought two brief wars with Israel in the past five years, is willing to enter a long-term truce with the Jewish state but says Abbas does not have a mandate to negotiate a permanent partition deal.