When President Barak Obama first made his controversial reference to the 1967 lines as the basis for future Israeli-Palestinian negotiations on May 19, 2011, he introduced one main caveat that stuck out: the idea that there would be "mutually agreed swaps" of land between the two sides. He added that both sides were entitled to "secure and recognized borders." But the inclusion of land swaps also raised many questions.
Several months after Israel captured the West Bank and Gaza in the 1967 Six Day War, the U.N. Security Council defined the territorial terms of a future peace settlement in Resolution 242, which over the decades became the cornerstone for all Arab-Israeli diplomacy. At the time, the Soviets had tried to brand Israel as the aggressor in the war and force on it a full withdrawal, but Resolution 242 made clear that Israel was not expected to withdraw from all the territories that came into its possession, meaning that Israel was not required to withdraw from 100 percent of the West Bank.
Given this background, Prime Minister Yitzhak Rabin made clear in his last Knesset address in October 1995 that Israel would never withdraw to the 1967 lines. He stressed that Israel would have to retain control of the Jordan Valley, the great eastern, geographic barrier which provided for its security for decades since the Six Day War. He didn't say a word about land swaps. For neither Resolution 242 nor any subsequent signed agreements with the Palestinians stipulated that Israel would have to pay for any West Bank land it would retain by handing over its own sovereign land in exchange.
So where did the idea of land swaps come from? During the mid-1990s there were multiple backchannel efforts to see if it was possible to reach a final agreement between Israel and the Palestinians. The Palestinians argued that when Israel signed a peace agreement with Egypt, it agreed to withdraw from 100 percent of the Sinai Peninsula. So they asked how could PLO chairman Yasser Arafat be given less than what Egyptian president Anwar Sadat received.
As a result, Israeli academics involved in these backchannel talks accepted the principle that the Palestinians would obtain 100 percent of the territory, just like the Egyptians, despite the language of Resolution 242, and they proposed giving Israeli land to the Palestinians as compensation for any West Bank land retained by Israel. This idea appeared in the 1995 Beilin-Abu Mazen paper, which was neither signed nor embraced by the Israeli or the Palestinian leaderships. Indeed, Abu Mazen (Mahmoud Abbas) subsequently denied in May 1999 that any agreement of this sort existed.
There is a huge difference between Egypt and the Palestinians. Egypt was the first Arab state to make peace, and in recognition of that fact, Prime Minister Menachem Begin gave Sadat all of Sinai. Moreover, the Israeli-Egyptian border had been a recognized international boundary since the time of the Ottoman Empire. The pre-1967 Israeli boundary with the West Bank was not a real international boundary; it was only an armistice line demarcating where Arab armies had been stopped when they invaded the nascent state of Israel in 1948.
In July 2000 at the Camp David Summit, the Clinton administration raised the land swap idea that had been proposed by Israeli academics, but neither Camp David nor the subsequent negotiating effort at Taba succeeded. Israel's foreign minister at the time, Shlomo Ben-Ami, admitted in an interview in Haaretz on September 14, 2001: “I'm not sure that the whole idea of a land swap is feasible.” In short, when the idea was actually tested in high-stakes negotiations, the land swap idea proved to be far more difficult to implement as the basis for a final agreement.
After the collapse of the Camp David talks, President Clinton tried to summarize Israeli and Palestinian positions and put forward a U.S. proposal that still featured the land swap. But to his credit, Clinton also stipulated: “These are my ideas. If they are not accepted, they are off the table, they go with me when I leave office.” The Clinton team informed the incoming Bush administration about this point. Notably, land swaps were not part of the 2003 Roadmap for Peace or in the April 14, 2004 letter from President Bush to Prime Minister Ariel Sharon.