Abdel Wahab Al-Darousheh, an Arab member of the Israeli parliament - the Knesset - said he had asked the Iraqi regime to receive a delegation of Israeli Arabs and Jewish peace activists. He said Yitzhak Rabin's government was open to the idea but was reluctant to endorse the initiative publicly for fear of upsetting the Americans.
Mr Darousheh, leader of the Arab Democratic Party, said the Israelis wanted to involve Iraq in the peace process but the United States was to keen to keep the pressure on Iraq.
Mr Darousheh, who took an Arab-Jewish delegation to Syria last month, has been discussing his proposed mission to Baghdad with Arab and Jewish peace activists and Israeli Iraqi Jews. He wants to draw up a list of 10 Arabs and 10 Jews to go on the delegation, with the possibility of including other Israeli MPs.
Noting that Iraq had not rejected Israel's peace accords with the Palestine Liberation Organisation and Jordan, Mr Darousheh said that bringing Baghdad into the peace process would benefit both nations and the Palestinians.
He said he intended to discuss details with Nizar Hamdoun, Iraq's representative at the United Nations. Mr Darousheh added that his party supported a lifting of sanctions against Iraq because they were hurting Iraqi people. He said he wanted Israeli Jews in the delegation to be able to examine the living conditions of the 3,000 Jews in Iraq.
Mr Darousheh raised the peace question with US officials in the State Department last week but found no desire in Washington to bring Iraq into the process.
For its part, Iraq has sent a message to the Israelis that it wants to normalise relations.