Former American peace envoy Dennis Ross, who is a senior advisor to US President-elect Barack Obama on Middle East policy, denied on Monday a Sunday Times report that Obama is planning to base his peacemaking efforts in the Middle East on the 2002 Arab Peace Initiative."I was in the meeting in Ramallah," Ross said. "Then-Senator Obama did not say this. The story is false."The Arab Peace Initiative, based on the Saudi peace plan of February 2002, calls for a full Israeli withdrawal from all territories taken in the Six Day War, including east Jerusalem, in exchange for normalizing ties with the Arab world.Quoting an adviser to Obama, the report states that during his visit to the Middle East in July, the president-elect said Israel would be "crazy" to refuse a deal that could "give them peace with the Muslim world."According to the paper, Obama's advisers feel that the time is right for such a deal as Arab countries fear rising radical Islamic movements and a potentially nuclear Iran. They have reportedly told Obama he should not waste time, and must begin pushing his policies within his first year in office while he still enjoys maximum goodwill.Senior Jerusalem officials last month dismissed a sudden surge of interest both in Israel and abroad in the initiative, saying it was a function of both a diplomatic process that has stalled and the transition periods in Israel, the US and the Palestinian Authority."Whenever the process stalls, there will be those who will pull out the Saudi plan," one senior official said. "And the Saudis have an interest in pushing this out there now, to put on a 'constructive face' with which to greet the new US president."Herb Keinon contributed to this report.