Mr Shimon Peres is to negotiate a peace plan negotiated with a senior Palestinian calling for a cease-fire followed by the establishment of a Palestinian state.
The plan was reached between the Israeli foreign secretary and Palestinian parliament speaker Mr Ahmed Qureia, also known as Abu Ala, over several months.
Mr Peres suggested the plan was also backed by Palestinian leader Mr Yasser Arafat.
"There is a proposal, which is acceptable to Abu Ala and his senders," Mr Peres told Israel Radio, adding that he has shown the plan to Prime Minister Ariel Sharon.
The two appeared to have reached broad agreement, but it remained far from clear how much support their plan would generate among Israeli and Palestinian leaders.
The foreign secretary faces a tough battle convincing Mr Ariel Sharon, who has shot down several of his initiatives and Mr Peres is making the rounds of Israeli politicians in an effort to win them over.
In his first detailed description, Mr Peres said it contains three stages, beginning with a cease-fire - a goal which has proven difficult over the 16 months of bloodshed.
Shortly after a cease-fire is achieved, the plan envisions a mutual recognition of Israeli and Palestinian states. The two sides would then have one year to negotiate final borders and other terms for the Palestinian state, and another year to implement any agreement.
Mr Peres said the new Palestinian state would initially be on territory already ruled by the Palestinian Authority - about two-thirds of the Gaza Strip and 40 percent of the West Bank.
The Peres-Qureia plan would then take a fresh approach, working out the most contentious details such as borders and the fate of 4 million Palestinian war refugees.
"The new thing in these ideas is that they clarify the end of the peace process for each side," Mr Qureia said.
PA