Israel's foreign minister, Avigdor Lieberman, has commissioned a confidential legal opinion that argues it would be legal under international law to transfer Arab-Israeli citizens to a new Palestinian state by shifting the border.

The internal foreign ministry document, leaked to the Israeli newspaper Haaretz, makes clear that the controversial proposal, which the rightwing foreign minister has been promoting for some years, would only be in line with international law if executed with the consent of those being transferred, and if it did not leave any of those transferred without any kind of citizenship.

The opinion appears to have been commissioned to lay the legal groundwork for the so-called Lieberman plan – or "populated-area exchange plan" – which he first proposed in 2004. The idea is that Israel will retain Jewish areas in the West Bank in exchange for giving the Palestinian Authority populous Israeli Arab areas within Israel, including the Galilee Triangle and the Wadi Ara valley, which includes cities such as Umm el-Fahm. However, the plan is opposed strongly by many Israeli Arabs.

The 18-page legal briefing was prepared by Ehud Keinan, a foreign ministry adviser for Lieberman, in February. It is entitled Territorial Exchange: transfer of sovereignty over populated areas in the framework of a final arrangement with the Palestinians, legal aspects. It appears to contradict previous expert opinion which suggested the plan would be illegal.

In the document, however, Keinan warns pointedly that any attempt to enact the proposal would not only affect Jewish-Arab relations inside Israel but would also change "Israel's image in the world".

Keinan argues that, without Palestinian co-operation, the measure would be both unfeasible and illegal and warns that, without a high level of international support for the legitimacy of the transfer, it might be viewed similarly to apartheid-era South Africa's creation of Bantustans.

Not long after Lieberman first proposed a population transfer a number of experts pointed out that international human rights legislation, to which Israel is a signatory, prevented the revoking of citizenship.

After Lieberman revisited the idea in a speech to Israeli ambassadors in January, Israeli Arab MPs in the Knesset and the city council of Umm al-Fahm rejected the notion. In a statement, the latter described the plan as a "second Nakba", using the Arabic word for the "catastrophe," referring to the large scale displacement of Palestinians that occurred during Israel's founding in 1948.

While opinion polls suggest that a sizeable minority is theoretically in favour of joining a future Palestinian state, the most recent survey, by the Dialog Institute in January, suggests only 31% would want to see their community transferred to Palestinian jurisdiction.

The new legal opinion relies heavily on precedents from the last century, including the 1919 convention between Greece and Bulgaria, when Bulgarian territory was transferred to Greece, the Evian Accords of 1962, which gave French colonialists three years to choose between French and Algerian citizenship, and the 1997 transfer of sovereignty over Hong Kong from Britain to China.

What is likely to be most controversial in the opinion is the suggestion that while the right to choice is accepted practice, it is not required by international law. It adds it is permissible to make the existence of an ethnic, religious or language link between the individual and the state a condition for citizenship.