Israeli Prime Minister Ehud Olmert is calling the revival of a 2002 peace plan at the Arab League summit this week a "revolutionary change" but he admits that Israel still rejects portions of the proposal.
The Arab plan, headed by Saudi Arabia, calls for the full recognition of Israel by Arab countries.
In return, the plan demands Israel withdraw from territories captured in the 1967 Mideast war. It also calls for a "just solution" for Palestinian refugees who lost their homes in Israel, either from fleeing or being driven out, following Israel's creation in 1948.
Olmert told Israeli newspaper Haaretz that the plan showed many Arab states recognized they "may have been wrong to think that Israel is the world's greatest problem."
He called the plan a "revolutionary change in outlook."
However, Israel continues to reject a full withdrawal proposal and has also ruled out the possibility of a refugee return.
Speaking to the Jerusalem Post, Olmert called a return "out of the question."
"I'll never accept a solution that is based on their return to Israel, any number,'' Olmert said.
Olmert told the daily Maariv that while he did not fully accept the Arab plan he did feel that it was a "positive approach."
"The Saudi initiative is not a detailed plan. It's what's called a 'state of mind,''' Olmert said.
He told another daily, amid a slew of interviews before the Passover holiday next week, that there was a real chance for a peace deal to be reached within the next five years.
"Things are happening that haven't happened in the past, and they're ripening. We have to know how to take advantage of this opportunity,'' Olmert told the daily Yediot Ahronot.
With files from The Associated Press
