John Kerry is closer to a deal that would rescue faltering Middle East peace talks, pushing a formula that would include the release of a convicted US spy and freedom for hundreds of Palestinians held by Israel, sources have said.
The deal would not include a freeze on construction in Jewish settlements in the West Bank as the Palestinians have demanded but would envisage Israel committing to show "great restraint" and not issue new housing tenders, the officials said.
The US secretary of state will return to the Middle East tomorrow to continue his push to salvage the negotiations
The State Department said Mr Kerry will visit Israel and the Palestinian territories, meeting Palestinian president Mahmoud Abbas in the West Bank town of Ramallah.
Mr Kerry met Israeli prime minister Benjamin Netanyahu this week in Jerusalem. After seeing Mr Abbas, he will travel to Algeria and Morocco.
An official close to the talks said a deal is emerging to extend the talks which could include the US release of convicted spy Jonathan Pollard, an American Jew who spied for Israel, in exchange for Israel's release of 400 Palestinian prisoners.
The remarks were the first sign of a breakthrough after weeks of US efforts meant to keep the negotiations afloat past a late-April deadline. The talks were on the verge of collapse after a planned Palestinian prisoner release did not take place as scheduled last week.
In a sign of the urgency, Mr Kerry flew unexpectedly to Israel from Europe yesterday, and met Israeli and Palestinian officials. Pollard's release was discussed as part of a deal that would extend the talks.
The Palestinians gave the emerging proposal a cool reception, saying it fell far short of their demands for a complete halt to settlement construction and the freedom for 1,000 prisoners of their choosing.
The inclusion of Pollard, a former US naval intelligence analyst who was convicted of spying for Israel nearly three decades ago, is the most surprising element of the deal and reflects the importance Mr Kerry has put on continuing the talks.
"According to the emerging deal, Pollard would be released before the Passover holiday," said the anonymous official. Passover begins on April 14.
For years, US officials have opposed any talk of releasing Pollard early. He is serving a life sentence at a federal prison in North Carolina but is eligible for parole in November 2015. He was arrested in 1985 and convicted of espionage for giving reams of classified documents to his Israeli handlers.
Pollard's case has become a rallying cry in Israel, where leaders say his lengthy prison sentence amounts to excessive punishment when compared to other US espionage cases. Prime minister Benjamin Netanyahu, who once visited Pollard in prison when he was out of politics, and other Israeli leaders have routinely pressed president Barack Obama and other US presidents for his pardon or release.
As recently as last week, US officials were outspoken in ruling out an early release of Pollard, b ut on Monday, they appeared to soften their line. "He is a person who is convicted of espionage and is serving his sentence. I don't have any updates on his situation," White House spokesman Jay Carney said in Washington.
Nitsana Darshan-Leitner, a lawyer for Pollard, would not comment directly on the deal but said that "once released, he will come and live in Israel". She said Pollard was in poor health and that twice over the last year he was kept overnight at a medical facility.
Securing Pollard's release would help Mr Netanyahu sell a package that would include more releases of Palestinian prisoners - something that would otherwise be unpopular with his hardline cabinet.
A number of senior officials have already come out against further releases, and Mr Netanyahu's coalition is dominated by lawmakers sympathetic to the West Bank settler movement.
Housing minister Uri Ariel said he would oppose Pollard's release if it was linked to freedom for Palestinian prisoners convicted of killing Israelis.
"Israel must not release murderers. Israel shouldn't reach such a deal," Mr Ariel, from the hardline Jewish Home party, told Army Radio. "Pollard deserves any other deal in order to be released."
Mr Ariel also said Pollard himself opposes being freed in exchange for Palestinian prisoners, citing people close to the US spy who conveyed Pollard's stance.
Israel and the Palestinians launched talks last July, agreeing to nine months of negotiations with the goal of reaching a final peace deal. After that became unrealistic, Mr Kerry scaled back his plans and said he would try to present a "framework" deal by the end of April, with the goal of extending talks through the end of the year to hammer out details of a final agreement.
A senior Palestinian official said Palestinian leaders were to meet later today and were likely to reject the proposed plan.
"The plan is vague and the Palestinians didn't accept it and will not accept it," the official said.
He said Israeli and Palestinian negotiators were still discussing details of the plan.
Israel has already released three groups of prisoners as part of the peace negotiations that began last July. All had served lengthy terms for attacks on Israelis, and scenes of them being set free and returning to jubilant celebrations angered the Israeli public.
A fourth group was scheduled to be released on March 29, and the delay prompted Palestinian authorities to threaten to end the negotiations. Palestinians view the thousands of prisoners held by Israel as heroes and freedom fighters while Israel considers them terrorists.
Under the emerging deal, the fourth group, including 14 Arab citizens of Israel, would go free.
A member of the US Parole Commission later said Pollard had waived a planned parole hearing.
Patricia Smoot said the hearing had been scheduled for today.
Commission administrator Stephen Husk said the hearing was to have been held at the prison in Butner, North Carolina, and that Pollard, who is imprisoned there, would have attended.
The 59-year-old repeatedly sought executive clemency from presidents Bill Clinton and George Bush but was denied.