Israel's Prime Minister has for the first time offered to accept a Palestinian state based along 1967 lines.
Benjamin Netanyahu's shift in direction comes three months after US president Barack Obama called for the same framework in a speech on the Middle East.
At the time Mr Netanyahu rejected the suggestion but on Monday Israeli television reported that he was no longer held. The report said that Mr Netanyahu would accept a deal whereby Israel would give up some territory in return for the main Jewish settlements in the West Bank.
The specific details of what Mr Netanyahu would accept remain unclear. But a government official did not deny the claims and said Israel would not leave all areas of the West Bank.
The official, who was not named, said: "We are willing in a framework of restarting the peace talks to accept a proposal that would contain elements that would be difficult for Israel and we would find very difficult to endorse."
The Palestinian Authority denied that Israel had put such an offer to them, although last week it emerged that secret talks were taking place in Ramallah between President Shimon Peres and chief Palestinian negotiator Saeb Erekat.
Mr Netanyahu's about-turn may have been prompted by the Palestinian plans to unilaterally seek independence at the United Nations next month.