2. Israel opposes the establishment of an additional Palestinian state in the Gaza district and in the area between Israel and Jordan.
   
3. Israel will not conduct negotiations with the PLO.
   
4. There will be no change in the status of Judea, Samaria and Gaza other than in accordance with the basic guidelines of the Government.

SUBJECTS TO BE DEALT WITH IN THE PEACE PROCESS:

1. Israel views as important that the peace between Israel and Egypt, based on the Camp David Accords, will serve as a cornerstone for enlarging the circle of peace in the region, and calls for a common endeavor for the strengthening of the peace and its extension, through continued consultation.
   
2. Israel calls for the establishment of peaceful relations between it and those Arab states which still maintain a state of war with it for the purpose of promoting a comprehensive settlement for the Arab - Israel conflict, including recognition, direct negotiation, ending the boycott, diplomatic relations, cessation of hostile activity in international institutions or forums and regional and bilateral cooperation.
   
3. Israel calls for an international endeavour to resolve the problem of the residents of the Arab refugee camps in Judea. Samaria and the Gaza district in order to improve their living conditions and to rehabilitate them. Israel is prepared to be a partner in this endeavour.
   
4. In order to advance the political negotiation process leading to peace, Israel proposes free and democratic elections among the Palestinian Arab inhabitants of Judea, Samaria and the Gaza district in an atmosphere devoid of violence, threats and terror.

In these elections a representation will be chosen to conduct negotiations for atransitional period of self - rule. This period will constitute a test for coexistence and cooperation. At a later stage, negotiations will be conducted for apermanent solution during which all the proposed options for an agreedsettlement will be examined, and peace between Israel and Jordan will be achieved.

5. All the above - mentioned steps should be dealt with simultaneously.
   
   
6. The details of what has been mentioned in (d) above will be given below.

THE PRINCIPLES CONSTITUTING THE INITIATIVE:

STAGES

5. The initiative is based on two stages:

1. Stage A - A transitional period for an interim agreement.
   
   
2. Stage B - Permanent Solution.
   
   

6. The interlock between the stages is a timetable on which the Plan is built: the peace process delineated by the initiative is based on Resolutions 242 and 338 upon which

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