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ISRAEL CONSIDERING SAUDI PEACE PLAN, BARAK SAYS

Israeli leaders are seriously considering a dormant Saudi plan offering a comprehensive peace between Israel and the Arab world in exchange for lands captured during the 1967 war, Defense Minister Ehud Barak said Sunday.

Barak said it may be time to pursue an overall peace deal for the region since individual negotiations with Syria and the Palestinians have made little progress.

Barak said that he has discussed the Saudi plan with Prime Minister-designate Tzipi Livni, who is in the process of forming a new Israeli government, and that Israel is considering a response.

Saudi Arabia proposed the peace initiative in 2002, offering pan-Arab recognition of Israel in exchange for Israel's withdrawal from Arab lands captured in 1967 - the West Bank, Gaza Strip, east Jerusalem and the Golan Heights.

The 22-member Arab League endorsed the plan last year.

Israel has said the plan is a good basis for discussion, but expressed some reservations.

"There is definitely room to introduce a comprehensive Israeli plan to counter the Saudi plan that would be the basis for a discussion on overall regional peace," Barak told Israel's Army Radio.

He noted the "deep, joint interest" with moderate Arab leaders in containing Iran's nuclear ambitions and limiting the influence of the radical Islamic Hezbollah movement in Lebanon and Hamas in Gaza.

Barak, who leads the Labor Party, is expected to play a senior role in the next administration.

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