French Foreign Minister Alain Juppe offered Prime Minister Benjamin Netanyahu a proposal on Thursday aimed at breaking the Israeli-Palestinian deadlock before the expected showdown at the UN General Assembly in September.

In a first for the wider international community, the French initiative incorporates the position that the goal of negotiations is "two states for two peoples," not just "a two-state solution."

The French proposal would revive the talks based on the following principles.

The border issue would be discussed based on the 1967 borders with agreed land swaps, in keeping with U.S. President Barack Obama's speech.

Security arrangements for both sides - Israel and the Palestinian state - would be negotiated.

The negotiations would begin with a discussion on borders and security arrangements, while talks on the refugees and Jerusalem would be put off to a later date.

The document states explicitly that the negotiations' goal is "two states for two peoples," not just "a two-state solution," as the international community and Palestinians have put it. This approach is significantly closer to Netanyahu's demand that the Palestinians recognize Israel as "the nation state of the Jewish people."

Contrary to the international community's former position, the proposal does not stipulate that Jerusalem would be the capital of both states, but only that the Jerusalem issue would be solved via negotiations.

The French document was given to Palestinian President Mahmoud Abbas on Wednesday during his meeting with Juppe in Rome, where President Shimon Peres met with Abbas on Thursday.

Juppe made it clear to Netanyahu and Abbas that he wanted their comments on the proposal within the next few days.

Juppe said that if both sides responded favorably, France would be willing to convene a peace conference in Paris next month to resume the direct talks between Israel and the Palestinian Authority, a French diplomat said.

Both Netanyahu and Abbas said they would reply to the proposal within a few days. A senior Israeli official confirmed that Netanyahu had received the document and was examining it.

Netanyahu told Juppe that Israel is demanding that negotiations be based on an Israeli military presence on the Jordan River, the recognition of Israel as the Jewish state and acknowledgment that Palestinian refugees would not return to Israel, the official said.

Netanyahu also said the talks would not be resumed with a unity Fatah-Hamas government that did not recognize Israel and renounce terror.

Juppe hinted to Netanyahu that the proposal was approved by the U.S. administration and other major European Union countries, the official said. He said the initiative was intended to present an alternative to the Palestinians' unilateral move to seek full UN membership in September.

If no progress is made in the peace process by September, France would consider recognizing a Palestinian state, he said.

The French initiative comes a week and a half after Netanyahu's speech in the U.S. Congress, which disappointed the American administration as well as key EU members - France, Germany, Britain, Italy and Spain.

Senior European diplomats said Netanyahu's speech did not deliver the goods that could block the Palestinian move in September.

The five large EU states are trying to persuade the Americans to convene a meeting of the Quartet's foreign ministers to present principles to resume the peace negotiations, including the principle to conduct the talks based on the 1967 borders with land swaps.

The Quartet - the United States, United Nations, EU and Russia - will also call for a peace conference in Paris. The Europeans believe this could dissuade the Palestinians from asking the United Nations to recognize the Palestinian state and return to the negotiations.

Haaretz has learned, however, that the White House and State Department are also working on ideas to stop the Palestinian move in September, even if they don't persuade the sides to resume negotiations.