but as I recall, DM Ehud Barak mentioned that the future Palestinian state could hold jurisdiction over some Muslim parts of East Jerusalem and as long as he's in Netanyahu's cabinet, then evidently this is the government's position as well. Negotiations between the parties would actually deal with more specifics on borders between the two states.
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U.S. Defense Secretary Carter: Campaign against ISIS 'far from over' (AP)
from the article: Abbas: Israel to blame for failed peace talks in Jordan