Sign up for Weekday J and get the latest on what's happening in the Jewish Bay Area.

JERUSALEM — The previous Israeli government was ready to create a Palestinian state in most of the West Bank, an Israeli academic and former key negotiator with the Palestinians revealed this week.

In an interview with the Jewish settler magazine Nekuda, political scientist Yair Hirschfeld said he and other Israeli and Palestinian negotiators last year reached an agreement in principle that was to serve as the basis of the permanent-status talks, which involve the most difficult issues separating the two sides.

In exchange for a demilitarized Palestinian state linked in a confederation with Jordan, the Palestinians would have agreed to drop their claims for a capital in eastern Jerusalem, said Hirschfeld, who also took part in secret Israeli-Palestinian negotiations that led to the signing of the 1993 Declaration of Principles.

Under the informal understandings, he added, Israel would have annexed about 10 percent of the West Bank, including lands containing 70 percent of the area's Jewish settlements.

The understandings are at odds with the policy of the new Likud-led Israeli government.

An adviser to Prime Minister Benjamin Netanyahu dismissed the understandings Wednesday, describing them as "an intellectual exercise" because neither side ever formally endorsed them.

Hirschfeld said the Palestinians also expressed a willingness to establish their capital in Abu Dis, a neighborhood outside the municipal boundaries of Jerusalem.

At the same time, the Palestinians would have control of the holy sites on the Temple Mount in Jerusalem's Old City and would have partial control of their affairs in eastern Jerusalem.

But the understanding called for Jerusalem to remain under overall Israeli control as the capital of Israel, he said.

Labor Knesset member Yossi Beilin, top foreign policy adviser to former Prime Minister Shimon Peres and a leading architect of the Palestinian peace process, confirmed Wednesday that an informal understanding had been reached.

In interviews with wire services and the Israeli media, Beilin said he was involved in the secret contacts and that the understandings could have concluded the final-status talks within months.

"There was an understanding on a demilitarized Palestinian state which would be linked in a confederation with Jordan," Beilin told Reuters.

Many of the details of the understandings were floated by Israeli officials working for the governments of Prime Ministers Yitzhak Rabin and Peres.

During the election campaign earlier this year, Likud officials charged that Labor government members had reached secret deals with the Palestinians. Labor officials denied it.

Publicly, both Israel and the Palestinians had been vague about their positions regarding the final peace accord.

But Hirschfeld said the understandings were reached well before the May elections.

"The Palestinians recognized that Israeli security comes first, that the settlements can stay and that the understandings on Jerusalem must recognize the dream of Jerusalem as the eternal capital of Israel," Hirschfeld told Israel Radio.

"The Palestinians were willing to accept all this, on condition that their three basic demands were recognized: an independent Palestinian state, recognition of their vested interests in Jerusalem and borders that are not necessarily drawn by the June 4, 1967 lines, but that no Arab areas east of it are part of Israel."

Although Netanyahu opposes such land-for-peace formulas and rejects a Palestinian state, Hirschfeld said the understandings "should and could" provide the basis for the new government's negotiations with the Palestinian Authority.

Hirschfeld said he had hoped that Peres would have disclosed details of the understandings before the May elections as proof that a permanent settlement could be achieved with the Palestinians.

"In my opinion, it was a huge mistake," Hirschfeld told the Israeli daily Ha'aretz. "If we had made this public, the Labor Party would be in power now."