Originally published by the Voice of America (www.voanews.com). Voice of America is funded by the US Federal Government and content it exclusively produces is in the public domain. March 30, 2007 Israel Welcomes Arab Peace Plan But Demands Changes --------------------------------------------------- http://enews.voanews.com/t?ctl=16DBE62:A6F02AD83191E160D1946F07EADC6E7A9574F7DCC14957C0 However, Palestinian leaders say there can be no compromise on allowing refugees to return home Israel is cautiously welcoming a peace initiative presented at this week's Arab Summit in Saudi Arabia. But Israel has reservations, and Palestinian leaders are warning against any changes in the plan. Robert Berger reports from the VOA bureau in Jerusalem. Ehud Olmert (File photo)Israeli Prime Minister Ehud Olmert describes the Arab peace initiative as a "revolutionary change." The plan offers Israel full diplomatic ties with all Arab states in exchange for an Israeli withdrawal to the 1967 borders. Mr. Olmert said the plan could bring peace to the region in five years, but in Israeli newspaper interviews, he warned that there would have to be significant changes before Israel can accept it. He categorically rejected a key Arab demand, saying Israel would never accept the "right of return" of millions of Palestinian refugees and their descendants to their former homes in Israel. Israeli officials say flooding the country with millions of hostile Palestinians would be national suicide. Israel also rejects a withdrawal to the 1967 borders because it would have to relinquish Jerusalem's sacred Old City and dismantle all Jewish settlements in the West Bank. Palestinian Prime Minister Ismail Haniyeh, left, talks to Saudi Foreign Minister Saud Al-Faisal after the opening session of the Arab Summit in Riyadh"The Saudi initiative is good maybe for a basis, but not as a dictate; you know, '67 borders, Jerusalem, [and] of course refugees is a non-starter," said Danny Ayalon, a former Israeli ambassador to Washington. But Palestinian Prime Minister Ismail Haniyeh, a leading Hamas militant, is warning against any changes in the peace plan. Palestinian Prime Minister Ismail Haniyeh said there can be no compromise on allowing the refugees to return home. Ayalon says that is not going to happen. "Israel will not and cannot accept any dictate," he said. Israel sees the peace initiative as a starting point for negotiations while the Arabs see it as the endgame. And it will be hard to bridge the gaps. .