The borders of the new state would be based on 1967 lines, with a territorial exchange allowing for Israel to annex major settlement blocs and an equal amount of area to be granted Palestine from areas now within Israel proper. No settlers would remain within Palestine.
The Palestinian state would be demilitarized, under agreements in which the international community would guarantee its security.
Regarding the right of return, “Palestinians refugees will return only to the State of Palestine; Jews will return only to the State of Israel.” In addition, Israel, Palestine, and the international community would set up a fund to compensate Palestinian refugees for their suffering.
As for Jerusalem, the Palestinians would have sovereignty over Arab neighborhoods, and Israel over Jewish neighborhoods. Neither side would have sovereignty over holy sites. Israel would act as guardian of the Western wall, Palestine as guardian of the Noble Sanctuary mosque compound.
I don’t want to talk about the justice or fairness of the plan. Just a couple of guesses about how such a plan would be received by Israelis and Palestinians:
My first guess is that if they were convinced that security guarantees would be effective (a very big ‘if’), the majority of Israelis would accept such a plan.
My other guess is that no imaginable Palestinian leadership would accept it.
Historically, since the 1937 Peel Commission and through the 2000 Clinton/Barak proposal, Israelis have been prepared to accept partition, even when it would be objectively disadvantageous, on the grounds that it would bring peace. Israelis who think that the entire Land of Israel should be in Jewish hands for religious reasons are a minority.
Most Arabs have always opposed partition. It has always seemed to them — even before the founding of the state — that the entire land belonged to them, indeed, that any land held by Jews was in some sense stolen (even if it was purchased). Compensation has never been considered an acceptable substitute for possession.
There is a fundamental asymmetry in the thinking of Israelis and Palestinians. Israelis are mostly pragmatic and most of them are more interested in peace than land. Indeed, opposition to withdrawal from the territories is overwhelmingly based on security considerations.
Palestinians are not pragmatic, they are idealistic. They are prepared to undergo great hardship in order to obtain what they think is theirs, and they are uncompromising. Even this proposal, signed by the moderate Nusseibeh — and if there ever was a moderate Palestinian, it’s Nusseibeh — has to take Palestinian idealism into account.
I’m referring, of course, to the statement at the end of the first paragraph: No settlers will remain in Palestine. Although one presumes that both sides envisage that Arabs will continue to live in Israel, the idealistic Palestinians require that Palestine must be completely Judenrein.