Foreign Minister Avigdor Lieberman on Tuesday presented the United Nations with his draft for a population and territory swap, as part of an eventual peace deal between Israel and the Palestinians.
Under Lieberman's controversial scheme, part of Israel's Arab population would be moved to a newly created Palestinians state, in return for evacuation of Israeli settlements in the West Bank.
"A final agreement between Israel and the Palestinians has to be based on a program of exchange of territory and populations," Lieberman told the United Nations General Assembly in New York.
The foreign minister stressed that his proposals did not represent a scheme for "populations transfer", a phrase that evokes historical proposals by Israel's extreme right to evict Palestinians from the West Bank and Gaza altogether.
"We are not talking about population transfer but about defining borders so as best to reflect the demographic reality," said.
But the ideas are nevertheless likely to provoke an angry reponse, especially from Israeli Arabs, who make up some 20 percent of the country's population.
This is not the first time that Lieberman, whose ultra-nationalist Yisrael Beiteinu party is the second-largest in Prime Minister Benjamin Netanyahu's right-wing coalition, has put forward the controversial proposals.
But his decision to place them before the General Assembly in his role as foreign minister will raise speculation over whether they are his private plan, or the official policy of the Israeli government, and Netanyahu is likely to face international calls for clarification.
A latest round of peace talks, which kicked off in Washington in early September, hit a deadlock at midnight on Sunday when Israel's self-imposed freeze on settlement building expired. It remains uncertain if Palestinian President Mahmoud Abbas will carry out threats to walk out of negotiations unless the freeze is renewed.
Lieberman,the firebrand leader of the ultra-nationalist Yisrael Beiteinu party and himself a resident of a West Bank settlement, has said repeatedly he will evacuate his home in the event of a peace agreement.
Yet Lieberman believes peace with the Palestinians could never be achieved until the Middle East confronts a greater threat, Iran.
"Iran can exist without Hamas but Hamas can't exist without Iran," he told UN delegates.
Hamas militants seized control of the Gaza Strip in 2007 and receive financial backing from the Iranian government of President Mahmoud Ahmadinejad.
"In order to solve a range of problems in the Middle East, not just the Israeli-Palestinian conflict, you have to solve the Iranian problem first," he said.