US president-elect Barack Obama and his designated secretary of state, Hillary Clinton, could support an exchange of territories and populations in the West Bank as part of an agreement between Israel and the Palestinians, former ambassador to the US Danny Ayalon said Monday. Ayalon is seeking a Knesset seat with Avigdor Lieberman's Israel Beiteinu party and has endorsed its diplomatic platform that calls for dividing Israel according to demographic lines and an eventual land swap when there is a Palestinian partner for peace. Under the plan, Israel would keep more of the West Bank and would give the Palestinians land in the Triangle that was part of the state before 1967 but is heavily populated by Arabs. In a meeting with Jerusalem Post editors and reporters, Ayalon revealed that when he explained the plan in his informal talks with the highest echelons of the outgoing administration of US President George W. Bush, "they didn't fall off their chairs." He predicted that Bush's successor would also be open to the idea. "It can be explained to Obama and Hillary," Ayalon said. "They are both very intelligent, and they both have the capacity to think outside the box. You can reason with them and they would like to see more creative ways to end the conflict." Ayalon said he could not believe his ears when he heard Palestinian negotiator Ahmed Qurei say over the weekend that there was no room in the West Bank for Jews. He said such statements proved that while Israel has increasingly softened its position since the Oslo process began 15 years ago, the Palestinians have not retreated an inch. "They want two Palestinian states or at least one and a half," Ayalon said. "We have a terrible foreign policy. People, even our best friends in Washington DC, say we have no red lines. We have, at best, pink lines that are very easily erased." Prime Minister Ehud Olmert recently proposed giving the Palestinians almost the entire West Bank, making up for the small percentage that would remain in Israeli hands by handing over unpopulated land in the Negev near the Gaza Strip. Ayalon said giving populated land made more sense, because the Israeli Arabs identified with the Palestinians and could help them out because they were better off financially. "Instead of giving the [Palestinians] open land in the Negev, enlarging the Gaza Strip and bringing it closer to Israel, we should trade populated areas, and we wouldn't need to remove anyone from their home," Ayalon said. Ayalon revealed that top politicians in Labor and Kadima have told him quietly that Israel Beiteinu's platform was correct, but he said they could not say so publicly because they depend on Israeli Arabs, who register en masse to vote in their primaries but do not vote for their party in general elections. He said that even Israeli Arabs have privately praised the idea. However, Ayalon admitted that such a plan was merely theoretical at this stage, because of the internal problems inside the Palestinian Authority. He said he opposed talking to Hamas, which he equated with Iran, and he questioned whether Abbas represented anyone outside his own office. "I don't see any point right now in negotiations with the Palestinians, which would be an exercise in futility," Ayalon said. "They need to get their house in order, and while they do that, we should change our political system." Regarding what many consider his main accomplishment in Washington, Bush's letter of April 14, 2004, indicating support for Israel keeping major population centers in the West Bank, Ayalon predicted that it "will be remembered as equal in its importance to the Balfour Declaration."