Israel's foreign minister on Sunday called for redrawing the country's borders to exclude some Arab citizens, raising the explosive proposal just as new peace talks with the Palestinians struggle to get under way.
Foreign Minister Avigdor Lieberman also rejected the foundation on which years of negotiation with the Palestinians have been based: Trading captured land for peace.
The principle guiding peace talks "must not be land for peace, but an exchange of land and people," Lieberman told reporters before the weekly Cabinet meeting.
Lieberman's Yisrael Beitenu party, or Israel is our Home, posted strong gains during elections last year with a message that questioned the loyalty of Israel's Arab citizens, a minority that makes up 20 percent of Israel's 7.6 million people.
His proposal is to redraw the border and transfer them to Palestinian rule, while also incorporating residents of Jewish settlements in the West Bank into Israel's borders. No one would be uprooted from their homes.
In a radio interview, Lieberman, who himself lives in a West Bank settlement, defended his proposal, saying Israeli Arab leaders do not recognize Israel's right to exist.
Israeli Arabs frequently identify with their Palestinian brethren in the neighboring West Bank and Gaza Strip.
Lieberman has consistently questioned the loyalty of Israeli Arabs and unsuccessfully tried to enact a law that would strip citizenship from people who refused to sign a loyalty oath. The proposal was rejected by a ministerial committee.
The loyalty issue has come up again because of the refusal of Palestinian negotiators and the Arab League to endorse Israel's demand that it be recognized as the homeland of the Jewish people.
Opponents say Israel's demand would compromise the rights of Israeli Arabs and Palestinian refugees who lost homes in the war over Israel's establishment in 1948.
Husam Zomlot, a Palestinian spokesman, said Lieberman's comments were unhelpful to peace efforts.
Lieberman "holds the second-most important position in the Israeli government. Therefore we are extremely discouraged by his remarks," he said.
"He is looking for ways to complicate the Middle East conflict with confrontations against the Arab community," said Jafar Farah, director of the Moussawa advocacy center for the Arab-Palestinian minority in Israel.
If Israeli Jews can't coexist with that minority, then how can they live in peace with the region's 400 million Arabs, he added.
Asked if Lieberman's position reflected the government's, official spokesman Mark Regev noted that the different parties in Prime Minister Benjamin Netanyahu's coalition "have different political outlooks."
Lieberman has made such declarations before, and the prime minister, not the foreign minister, sets Israeli foreign policy. But the comments threatened to further cloud the negotiating climate at a sensitive time.
Palestinians envision the West Bank as the hub of a future state and object to any Jewish construction there. Netanyahu says a 10-month slowdown on building won't be extended beyond its Sept. 26 expiry.
There is intense pressure from the U.S. on Israel to extend the slowdown, and at the same time, on the Palestinians not to abandon the talks. Both sides say they expect to reach a compromise.
The peace talks do not include the Hamas militant group, which has ruled the Gaza Strip since 2007. Hamas seized control of Gaza, one of the territories claimed by the Palestinians, from Israel's negotiating partner, President Mahmoud Abbas, and controls the area with an iron fist.
On Sunday, unknown assailants burned down a Gaza amusement park that had been shuttered by the Hamas government in August after men and women were seen mixing together. Hamas police also accused the park's staff of serving water-pipes to women, something the Islamic group has banned.
Masked men tied up guards at the Gaza Crazy Water park early Sunday, dumped gasoline around the plastic slides and torched them, said one of the owners, Ala al-Araj.
Conservative Gazan Muslim tradition frowns upon unmarried men and women mixing together and disapproves of women smoking, although both are done among the territory's small upper class.
Hamas officials would not comment Sunday.