Both Yediot Aharonot and Ha’aretz are reporting that over the past couple of years, Israel and Syria have been talking about a peace agreement and have hammered out some solutions to the difficulty of returning the strategic Golan Heights to Syria in exchange for peace.

Representatives from Israel and Syria , who have been holding talks for about two years, reached a document of understanding for a peace agreement between the two countries, Haaretz daily reported Tuesday morning.

The unofficial talks were held with the knowledge of senior official in the government of former Prime Minister Ariel Sharon and later in the government of Prime Minister Ehud Olmert .

According to the document, Israel will withdraw from the Golan Heights to the lines of June 4, 1967. The timetable for the withdrawal remains open.

Syria demanded that the withdrawal will be carried out over a five-year period, while Israel asked to spread out the withdrawal over 15 years.

The document of understandings (a “non-paper”) has no legal standings, but a political standing, and it was generated in discussions held between September 2004 and July 2006. The great part of the document was formulated in August 2005.

It was also agreed that militarized areas would be set up in the Golan Heights territories evacuated by the Israeli forces. Areas of lowered military presence would be set up in Israel, west of the international border, and in Syria, east of the Golan Heights. The ratio in terms of territory would be 1:4 in favor of Israel.

On the water issue, it was agreed that Israel would retain control over the use of the waters of the Jordan River and Lake Kinneret (the Sea of Galilee). A park would be set up east of the border, which both Israelis and Syrians would be free to access and which would be run by the Syrians.

The park would be set up after the Israeli withdrawal is completed and the Syrian sovereignty is implemented, and would be open to Israelis without Syrian approval. The park would be located on a significant part of the Golan Heights.

Syria also agreed to end its support for Hizbullah and Hamas and distance itself from Iran .

The text for this agreement (which currently is not in force) is available at Ha’aretz.

The Yediot article indicates that this is far from a done deal and that Israel is resisting going to the next step which the Syrians would like to include the Americans.

Also, it is clear that with this public announcement, a battle royale looms inside Israel as to the value of this deal and whether giving up the Golan Heights is necessary, desirable or worthwhile.

Still, this is good news. It means that many of the public pronouncements – of hate and war – are not the only way in which Israel and Syria communicate.

Update: Sharon’s former advisor, Dov Weisglass denies story and so does Olmert’s spokesperson as well as a Syrian official from their Foreign Ministry. If I were them and it were true, I’d also be denying.

New Update: Olmert denies any talks and his office is claiming the former Foreign Ministry director who was Ha’aretz’s source would have been conducting any talks as a private person, not a representative of Israel.

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