A Middle East peace initiative floated by Saudi Arabia's Crown Prince Abdullah in 2002 is being revived at the Arab League Summit in Algiers despite that fact that it was rejected by Israel three years ago.

The plan:

The basic outline or principles of the Saudi plan are known, but the detail is vague. The main points are:

• Israel is required to withdraw from all territories seized in 1967 - the West Bank, Gaza, East Jerusalem and the Golan Heights.
• In return, all Arab states offer normal diplomatic relations - including a peace deal that recognises Israel's right to exist and secures its borders.
• The plan was formally announced at an Arab League summit in Beirut in March 2003.

Other details are far less firm, but can be gleaned from an interview given to the New York Times newspaper by Crown Prince Abdullah:

• Reports suggest that the Saudi plan allows for Israeli sovereignty over the Western or Wailing Wall in Jerusalem - one of Judaism's holiest sites.
• The same reports suggest that the plan allows for the transfer of some areas of the West Bank to Israel in return for equivalent transfers to a Palestinian sate.
• It is also suggested that the issue of the right of return for Palestinian refugees to Israel has been dropped or sidestepped. This issue is crucial because many Israelis see the Palestinian claim to the right of return as a fundamental demographic threat to the idea of Israel as a state for Jewish people.

At present the only Arab governments that recognise Israel are the Palestinian Authority, Egypt and Jordan.

The idea that all Arab states might offer Israel normal relations and recognise it as a state in the region is the most striking element in the Saudi proposal.

The problems:

From the Israeli point of view, the plan as it stands has certain problems. The crucial sticking points may be:

• Giving up all of the Golan Heights
• A Palestinian political and administrative presence in Jerusalem
• The dismantling of all Israeli settlements in Golan, West Bank and Gaza
• The potential problem of the right of return for Palestinian refugees.

Of course Prime Minister Ariel Sharon is, and always has been, opposed to full Israeli withdrawal to 1967 borders. Should he engage with the Saudi proposal, he will need to undergo a fundamental conversion.