Interesting news:

JERUSALEM (AP) - A confidant of Israeli Prime Minister Ehud Olmert said Monday that his government would support a division of Jerusalem, which is reportedly a key component of an Israeli-Palestinian declaration to be made at a U.S.-sponsored Mideast peace conference next month.

As part of recent negotiations between the sides, Deputy Vice Prime Minister Haim Ramon has proposed turning over many of the Arab neighborhoods of east Jerusalem to the Palestinians. Ramon said the Palestinians could establish the capital of a future state in the sector of the city, which Israel captured from Jordan in the 1967 Mideast war.

In return, Israel would receive the recognition of the international community, including Arab states, of its sovereignty over Jewish neighborhoods and the existence of its capital there, Ramon said.

On Monday Ramon said even hawkish elements of Olmert's coalition, like Cabinet Minister Avigdor Lieberman's Yisrael Beiteinu Party, would back such an Israeli concession. The centrist Labor Party would also support the proposal, Ramon said.

"There are two central parties that agree to this," Ramon told Army Radio. "The most important thing is to preserve the state of Israel Jewish and democratic."

Under his proposal, neighborhoods in east Jerusalem where about 170,000 Palestinians live would be transferred to Palestinian sovereignty, Ramon said.

Prediction: the Palestinians and Arabs will respond to this proposal by lobbing more mortars at Israelis, together with stepped up attempts at suicide bombing. They are unlikely to accept the proposal. Instead, they will complain about what Israel isn't offering them, accuse them of playing games and not being serious, along with offering lists of the other faults of the Israeli government and how that once again Israel is guilty of not being serious about peace.

If they do accept it, the Palestinians will simply move in mortars and other weapons and use the newly acquired territory for more attacks against the Jews. Any Israeli response will be greeted by more accusations of their warmongering and oppression.