IT was the moment the Palestinians might have had a state, with a capital in East Jerusalem. For a single moment, the dove of peace hovered hopefully over the Middle East. On September 16 last year, the then Israeli prime minister, Ehud Olmert, offered the Palestinian leader, Mahmoud Abbas, the most far-reaching and comprehensive peace deal any Israeli prime minister has ever offered.
Mr Olmert recalls his pleas to Mr Abbas to accept the deal: "I said to him, do you want to keep floating forever - like an astronaut in space - or do you want a state? I told him he'd never get anything like this again from an Israeli leader for 50 years."
Mr Olmert, who as a rule avoids the media these days, has undertaken hours of discussion and interviews with The Weekend Australian and provided unprecedented detail of his peace offer to Mr Abbas.
The interviews took place amid growing tension over West Bank settlements. Palestinians appealed to the US yesterday to raise pressure on Israel, saying an Israeli plan to halt new construction in the West Bank was insincere.
Mr Olmert says such disputes could have been resolved with his deal. He recalls meeting Mr Abbas more than 35 times for "intense, serious" negotiations, in the two years leading up to the September 16 offer last year.
Mr Olmert says his offer to Mr Abbas included a Palestinian state occupying 94 per cent of the West Bank and all of Gaza. This would have allowed Israel to keep the major Jewish population areas in the settlements in the West Bank.
But in return he would have given the Palestinians an equal parcel of land from Israel proper in compensation. He offered Palestinian sovereignty over all the Arab areas of East Jerusalem, so that it could function as a capital for the new Palestinian state.
Dividing Jerusalem is an explosive issue in Israeli politics.
Mr Olmert recalls his own struggle to come to grips with his offer on Jerusalem: "This was a very sensitive, very painful, soul-searching process. While I firmly believed that historically and emotionally Jerusalem was always the capital of the Jewish people, I was ready that the city should be shared."
Perhaps Mr Olmert's most radical and audacious proposal was for an international administration of the sites in Jerusalem holy to Jews, Muslims and Christians. Mr Olmert proposed forming an area of "no sovereignty" to be administered jointly by Saudi Arabia, Jordan, the new Palestinian state, Israel and the US.
He offered to build a tunnel, under Palestinian control, between the West Bank and the Gaza Strip. Mr Olmert says every European leader, and senior Americans, who knew of the plan acknowledged it as the most far-reaching and extensive peace offer Israel has made.
Mr Olmert still regards Mr Abbas as a peace partner for Israel.
"I think he's genuine in his desire to achieve a Palestinian state and he recognises the right of Israel to exist," he says.
Mr Olmert speculates that Mr Abbas didn't accept the deal because he felt he could not deliver the Palestinian commitment to it, or perhaps because he feared the outcome of approaching Israeli elections. But nor did Mr Abbas directly reject the deal. Instead he said he wanted to bring experts back with him the next day.
But the next day, the Palestinians' chief negotiator postponed the meeting.
"I never saw him again," Mr Olmert says.
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