Report: Trump plan includes Palestinian state with capital in eastern Jerusalem February 28, 2018President Donald Trump and Palestinian leader Mahmoud Abbas (AP/Evan Vucci)(AP/Evan Vucci)Report: Trump plan includes Palestinian state with capital in eastern JerusalemAccording to Arab media reports, the Trump administration’s peace plan includes a Palestinian state with eastern Jerusalem designated as its capital.By: Batya Jerenberg, World Israel NewsQuoting “knowledgeable Arab diplomatic sources” in Paris, the London-based Saudi newspaper Asharq al-Awsat reported on Wednesday that the Trump administration’s coalescing peace plan could contain several major “carrots” for the Palestinians, while not ignoring Israel’s security needs.Other elements may include Palestinians giving up the “right of return” and putting the Old City under an “international mandate.”Recognizing a Palestinian state with eastern Jerusalem as its capital is the biggest nod to Palestinian demands, according to the report.The purported Trump proposal, seemingly taken from former Israeli prime minister Ehud Olmert’s offer to Palestinian leader Mahmoud Abbas in 2008, would dilute Israeli jurisdiction over Jerusalem even further.According to the report, smaller, outlying Jewish villages in Judea and Samaria would be “relocated,” while the Palestinian Authority’s security and administrative control of Areas A and B would be expanded.The inducements for Israel reportedly include retaining military control of the Jordan valley as well as security control over Judea and Samaria, including its borders. Egypt would have security control over the Gaza Strip. In addition, all large villages and towns would stay part of Israel.Read Arab MKs pay solidarity visit to 'terror-supporting' imamAnother key Israeli demand is addressed as well: The Palestinians who fled Israel in 1948 and their descendants would have no “right of return” to Israel proper. They would stay in the countries they currently live in and receive monetary compensation.According to the Saudi paper’s sources, the US would ask the international community to help establish the new country’s institutions by collecting the whopping sum of $40 billion. The money is not intended to “buy” Palestinian acceptance of the peace plan, the diplomats stressed.The Americans would like to present the peace plan – which has no date of delivery as yet – in the framework of an international conference that would be held in one of the Arab capitals. In order for Israelis to be able to attend easily, this would have to be either Amman or Cairo, most likely the latter.Early reaction to the purported plan in Israel was not favorable. Leaders of the Sovereignty Movement, a Judea and Samaria activist organization, referred to the plan as “a regional disaster.”“Netanyahu must come to his senses and make it clear to his American partners in these discussions and to his friend President Trump that an Arab state in the heart of the Land of Israel would bring disaster upon the State of Israel and would totally undermine the security and economic stability in the entire region,” commented Sovereignty Movement heads Yehudit Katsover and Nadia Matar. JerusalemPalestinian StateTwo State SolutionUS embassy