US-Saudi peace plan proposes Abu Dis as 'capital of Palestine' instead of Jerusalem

A peace plan emerging from the US administration's recent diplomatic push is heavily weighted in Israel's favour, reports suggest, with alleged Saudi positions on Jerusalem seemingly aligning with Trump's expected policy shift to recognise the city as Israel's capital.

In August, Trump dispatched a delegation of top US envoys to the Middle East to discuss peace talks, which have been frozen since negotiations collapsed in 2014.

Throughout the American diplomatic efforts Palestinian officials have expressed impatience with senior adviser Jared Kushner, saying they received no clear vision from the US on the direction or substance of talks.

Some Palestinian officials even accused Kushner's team of sounding like "Netanyahu's advisers".

In October, Kushner then made a secret four-day visit to Saudi Arabia before travelling to Israel to discuss the Middle East peace process, according to an official source at the White House.

A month later President Mahmoud Abbas arrived in Saudi Arabia for impromptu talks with King Salman and Crown Prince Mohammed bin Salman.

Palestinian, Arab and European officials who heard Abbas's version of the conversations in Riyadh say Crown Prince Mohammed bin Salman suggested a Palestinian state on non-contiguous parts of the occupied West Bank with limited sovereignty, according to the New York Times.

Riyadh also suggested that Abu Dis, a suburb of East Jerusalem cut off by Israel's separation barrier, could be the Palestinian capital, according to a Lebanese official who spoke to Abbas following his Saudi talks, the NYT reported.

The majority of illegal settlements in the West Bank would also remain in place, while the right of return for Palestinian refugees and their descendants was also ruled out.

A Lebanese politician and senior Lebanese official briefed on the discussions in Riyadh said that Abbas had been given a two month deadline to accept the deal or otherwise would face pressure to resign, the NYT reported.

The White House on Sunday denied the details of the alleged plan, staying it was still months away from a final blueprint on its peace proposal.

Saudi Arabia also denied details of the plan, the NYT reported, saying it was committed to a settlement based on the Arab Peace initiative of 2002, which includes a Palestinian state on 1967 borders with East Jerusalem as Palestine's capital.

On Monday, Trump must decide whether to sign a legal waiver that would delay plans to move the US embassy from Tel Aviv to Jerusalem for another six months.

According to diplomats and observers, he is also now expected to announce in a speech on Wednesday that he supports Israel's claim on Jerusalem as its capital.