'US might offer Israel deal - settlements in return for final borders'

The Obama administration is considering allowing Israel to complete hundreds of housing units currently under construction in the West Bank in exchange for Jerusalem's acceptance of American terms on final borders, east Jerusalem newspaper Al Quds reported on Monday. According to the report, senior officials in the US administration believe that some 300,000 Palestinian refugees will be able to return if Israel and the Palestinian Authority carry out a territorial exchange. Washington would also insist that Israel conduct a referendum ahead of such a deal, due to "inner difficulties" in both the Israeli and Palestinian administrations. The Jerusalem Post could not independently confirm the report.