Plan recognizes Israeli 'sovereignty' in disputed valley: Netanyahu

U.S. President Donald Trump on Tuesday proposed the creation of a Palestinian state with a capital in eastern Jerusalem, dependent on Palestinians taking steps to become self-governing.

Senior administration officials, briefing Reuters on the plan the president announced at the White House, said that under Trump's proposed Middle East peace plan the United States will recognize Israeli settlements on the occupied West Bank.

In exchange, Israel would agree to accept a four-year freeze on new settlement activity while Palestinian statehood is negotiated.