'New U.S. plan calls for demilitarized Palestine'

Netanyahu: No Palestine without demilitarization US: Yes Sir!

Egyptian President Hosni Mubarak and U.S. President Barack Obama will discuss on Tuesday a new initiative which would see a demilitarized Palestinian state set within amended 1967 borders and Jerusalem as its shared capital with Israel, according to the London-based Al-Quds al-Arabi.

The initiative, which was reportedly raised by past U.S. president Jimmy Carter, former secretary of state James Baker and former national security adviser Brent Scowcroft, would also have Palestinians concede on their demand for the right of return, in exchange for compensation.

Mubarak arrived in Washington on Monday for his first White House talks. He met with Secretary of State Hillary Clinton after arriving and is set to meet with Obama on Tuesday.

Prime Minister Benjamin Netanyahu said a few months ago that he would endorse the concept of a Palestinian state, so long as it were demilitarized. More