Deputy Prime Minister and Minister for Strategic Affairs Avigdor Lieberman drew his red lines on Saturday night in an official document presented to Prime Minister Ehud Olmert ahead of the US-sponsored Mideast peace conference scheduled to take place in Annapolis by the end of the year.

Lieberman demanded that the permanent agreement with the Palestinians include an exchange of populations and territories, in a way which will guarantee the Jews a majority of 80% in the State of Israel

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The document released by Lieberman's office included the following objectives for the diplomatic negotiations with the Palestinians on the permanent agreements:

1. Israel's permanent borders will be based on historic, security-related, demographic and geographic parameters.

2. Any future diplomatic agreement must guarantee the State of Israel's Jewish, Zionist and democratic nature.

3. Any future diplomatic agreement will include recognition of the permanent borders by the international community, the neighboring countries, and the Palestinians.

4. Any future diplomatic agreement will include a clause guaranteeing the end of the conflict, meaning no mutual demands in the future.

Lieberman demanded that Olmert determine Jerusalem's borders in a way that will leave the "holy basin" under full Israeli sovereignty, while implementing the religious ritual arrangements.

The borders of the "holy basin", according to Lieberman: From the east: The Mount of Olives and Mount Scopus; from the north: Sheikh Jarrah; from the south: Silwan and Mount Zion. The territory and population exchange principle will also apply to the refugee camps and villages near Jerusalem.

Lieberman opposed the issue of a safe crossing between Gaza and the West Bank.

"The State of Israel will not allow a passage between Gaza and Judea and Samaria through its sovereign territory. This situation is similar to the reality which existed before June 4, 1967, as well as the reality before the establishment of the State of Israel."

Addressing the refugee issue, the Yisrael Beiteinu chairman ruled that "the State of Israel will not allow the right of return, not on the level of principles and not in humanitarian cases. This issue is definite and will not be negotiated."

Guarantee a Jewish majority in Israel

Lieberman also outlined the principles guiding his party: "Entering negotiations on the permanent agreement requires first and foremost obtaining security for the State of Israel and a significant improvement in the Palestinians' economic situation.

"Any attempt to force a diplomatic arrangement before a substantial drop in terrorist activities, particularly the Qassam fire, and in a reality in which there is an unemployment rate of more than 80% on the Palestinian side – is destined to fail.

"A salutation to the conflict must be based on an agreement to exchange territories and populations, and the creation of a reality of two homogenous nation-states, so as not to create a situation in which the Palestinians have a state and a half and the Jews have half a state.

"This principle is crucial, particularly in light of the vision presented by the Israeli Arab Higher Monitoring Committee. We must not accept a reality in which a Palestinian state will be established without one Jew, while the State of Israel turns into a bi-national state with more than 20% minorities."

The minister also ruled that "the State of Israel's permanent borders will guarantee the continuation of the Jewish majority and the democratic regime, and will provide security for all its citizens.

"The permanent agreement which will be signed between the parties will constitute a joint and international agreement and will replace Security Council Resolutions 242 and 338. The international community is committed to be a side in the agreement, while providing guarantees and being actively involved in security-related, diplomatic and economic issues."

Lieberman also demanded that NATO forces be stationed in the territories should the Palestinians fail to create an effective security system to halt terrorist activities. He added that the United States and the European Union must invest directly in the Palestinian economy in order to guarantee an appropriate standard of living and workplaces for the Palestinians.

In his document, Lieberman ruled that the conflict was not territorial, but rather national-religious, and compared the situation to that in Kosovo, the Balkan peninsula and northern Ireland