Israel and the Arab world on Wednesday will be watching with great interest United States President Barack Obama's State of the Union address to Congress.

In a recent interview with Time magazine, Obama admitted that he "overestimated" his ability to persuade both Israel and the Palestinians to resume their peace negotiations. Nevertheless, Obama made it clear that the U.S. will continue to work with the parties to achieve that goal.

Indeed, in the aftermath of the visit by U.S. special envoy to the Middle East George Mitchell, there are now various plans floating in the region, all aimed at the resumption of the Israeli-Palestinian negotiations. Israeli Prime Minister Benjamin Netanyahu said on Sunday that Mitchell had expressed "interesting ideas that I intend to pursue."

There is still no Palestinian reaction to Mitchell's proposals.

At the beginning of Mitchell's talks in Jerusalem, Ramallah, Amman, Cairo and Syria it became clear to all concerned that Israel will make no more "gestures" to the Palestinians. In a meeting with Norway's visiting foreign minister, Israeli President Shimon Peres said that the chairman of the Palestinian Authority, Mahmoud Abbas, had complained to him that the "Americans have put me at the top of the tree, but they took away the ladder." Netanyahu told Mitchell that each time that Israel makes a gesture to the Palestinians, "Abbas climbs even higher the tree of exaggerated expectations."

During a Jan. 8 visit to Washington, Egyptian Foreign Minister Abul Gheith, presented to U.S. Secretary of State Hillary Clinton and Mitchell a peace plan that was co-ordinated with the Palestinians. Called the Endgame Plan, Egypt suggests that the U.S. will give the parties written American guarantees that the negotiations will lead to the establishment of a Palestinian state, based on 1967 ceasefire lines, but with a possibility of land exchanges of up to three per cent. This would include some of the settlement blocs that former U.S. president George W. Bush promised former Israeli prime minister Ariel Sharon would be given to Israel.

If the negotiations begin, Israel should a undertake few confidence-building measures, such as ending the siege of the Gaza Strip, opening all the crossings in the West Bank and removing of what remains of roadblocks. The exchange of land will exclude East Jerusalem, which will become the capital of the future Palestinian state. The negotiations would last no more than two years, with the first nine months devoted only to the issue of final borders.

In his discussions with Mitchell last week, Abbas insisted on a total freeze on settlements in East Jerusalem, "as long as the negotiations go on." Alternatively, Abbas suggested to Mitchell that the U.S. negotiate with Israel on the Palestinians' behalf.

Should Israel agree to these proposals, Egypt is suggesting that President Hosni Mubarak host a summit with the participation of Israel, the Palestinians, Jordan and the Quartet ---- the U.S., Russia, the United Nations and the European Union.

During his visit to Cairo last month, Netanyahu accepted some elements in the Egyptian plan, but insisted on an Israeli presence in the Jordan valley the passes from Jordan to the West Bank. In a press briefing last week, Netanyahu explained that in view of what happened in the Gaza Strip, where Abbas lost control to Hamas, Israel wants to prevent any smuggling of rockets and arms from Jordan into the West Bank.

Mitchell accepted such a separation between Jordan and the West Bank, but suggested it be enforced by a multinational force, not Israel. Egypt and Abbas agreed to Israeli "observers" but not to international forces.

Mitchell also suggested a shared Israeli-Palestinian sovereignty over East Jerusalem and the Holy Places in the Old City.

It appears that Netanyahu had this proposal in mind when he said that "Mitchell brought some interesting ideas that we could accept."