Palestinians offered Israel "the biggest Jerusalem in history", including all but one of the large Israeli settlements built in the occupied Arab eastern sector, according to a major leak of detailed minutes of negotiations going back a decade.
The leak of confidential accounts of the talks drawn up by Palestinian negotiators underlines the extent of concessions made by the Palestinians during the ultimately abortive Annapolis process under the US presidency of George Bush and the Israeli premiership of Ehud Olmert.
Israel regards itself as having annexed the whole of East Jerusalem after the 1967 Six-Day War, but that has never been accepted by most of the international community, including Britain, which backs Palestinian demands for East Jerusalem as the future capital of a Palestinian state.
As recently as January last year, Saeb Erekat, the Palestinians' chief negotiator, told a US official that proposals from his side would give the Israelis the biggest Jerusalem in Jewish history and other concessions. "What more can I give?" he asked.
Another minute among some 1,600 papers leaked to the Arab satellite television channel Al Jazeera shows that in 2008, Palestinian negotiators made it clear to the then Israeli foreign minister, Tzipi Livni, that all the big settlements regarded by Israel as Jewish "neighbourhoods" on the outer edges of the city could be yielded to Israel, except for Har Homa.
These would include Gilo, the large settlement bordering Jerusalem and Bethlehem, which has since become an even more contentious issue since the disclosure of Israeli plans to build another 1,400 houses there.
Mr Erekat is quoted in the minutes as saying during the talks that "this is the first time in Palestinian-Israeli history in which such a suggestion is officially made."
Despite the concessions, the Palestinians continued to make it clear that East Jerusalem must be the future Palestinian capital. The leak may be a further factor threatening to destabilise the already faltering international struggle to get some form of peace negotiations back on track.
The concessions – and perhaps too the graphic language in which they are expressed – will be seized on by critics to show how far Palestinian President Mahmoud Abbas is prepared to compromise to get a Palestinian state.
The concessions will also be read by some Palestinians as falling short of the more robust public rhetoric used by the Palestinians' leaders. Equally, they may go some way to undermining a widespread argument in Israel that "no partner" exists for meaningful negotiations.
The documents appeared to be an extensive, but not comprehensive, record of the negotiations. Some media attributed the extent of the concessions by the Palestinian negotiators to growing weakness and desperation on their part. But some of the minutes posted on websites appear to give a more mixed picture.
For example, while Palestinian negotiators did indeed offer up most of the big Jerusalem settlements during discussions in 2008, Ms Livni is reported to have made clear that was unacceptable because the Palestinians were refusing to concede other settlements to Israel.
"We do not like this suggestion because it does not meet our demands," Ms Livni told the Palestinians.
As well as Har Homa, the settlements that the Palestinians were insisting should fall within a future Palestinian state included Ariel – a large settlement jutting into the northern West Bank from Israel – and, most notably, Maale Adumim, the largest Israeli settlement in the West Bank, which the Israelis have always maintained should remain within Israel.
Capital point: why the talks hinge on Jerusalem
Israel controls Jerusalem, and claims it as its "indivisible and eternal" capital. It annexed East Jerusalem after the Six Day War in 1967, a move not recognised internationally.
The Palestinian Authority is based in Ramallah, but covets East Jerusalem as the capital of its independent state.
The Clinton Parameters of 2000, a US-sponsored peace plan, envisaged that the Temple Mount would fall under Palestinian control, along with some Arab suburbs in East Jerusalem. Israel could claim the Jewish parts of the city, including settlement blocs in East Jerusalem, and have access to Jewish sites. Although both sides tentatively agreed to the proposals with caveats, the negotiations collapsed, leading to the Second Intifada.
Ehud Olmert, who had resigned but remained head of a caretaker Israeli government, privately proposed a plan to the Palestinians in late 2008 to place parts of Jerusalem under international control.