The last time Israeli leaders sat down for meaningful peace talks with Palestinian negotiators, then-Jerusalem Mayor Ehud Olmert led a march around the Old City's ancient walls to protest any plans to divide his adopted home.

"No concessions on Jerusalem," Olmert said on the eve of the 2000 Camp David summit. "For 33 years, Israel has said there will never be a compromise on Jerusalem. Do you think we were joking?"

But seven years, one Palestinian uprising and three Israeli elections later, Olmert, now Israel's prime minister, is floating the idea of carving up the city he led for 10 years. As he gears up for the most intense round of peace talks since the Camp David talks failed, Olmert has indicated that he's prepared to turn over Arab neighborhoods of Jerusalem to the Palestinians.

In many ways, Jerusalem is the third rail of Israeli politics. Few are willing to touch it, and those who do often get burned. Former Prime Minister Ehud Barak came close to ceding control of about half of the Old City to the Palestinians before the Camp David talks crumbled, his government lost its credibility and Palestinians launched their second uprising.

Olmert faces similar risks when he heads to the Bush administration peace conference that's expected later this fall in Annapolis, Md.

Olmert is looking to redefine the debate by suggesting that the spiritual heart of Jewish Jerusalem would be strengthened by redrawing the boundaries to exclude at least some of the outlying Arab neighborhoods that were absorbed when Israel took control of the entire city from Jordan in the 1967 Six-Day War.

"Was it necessary to include the Shufat Refugee Camp, Arab Es-Sawahra, Walaja and other villages and declare, 'This, too, is Jerusalem?' " Olmert said earlier this month in a speech to the Israeli parliament. "Of this, I must confess, I am not convinced."

He's already winning some surprising support.

Conservative leader and Cabinet member Avigdor Lieberman, a longtime advocate of swapping Arab communities in Israel for Jewish settlements in the West Bank, is backing the concept as a way to reduce the number of Arabs in Israel.

"We are willing to swap," Lieberman said during a tour of one Arab neighborhood outside the Old City walls. "And when I look at the demography, I don't think the state of Israel has to subsidize refugee camps, whether they are in Nablus or in Gaza or in Jerusalem."

Olmert's trial balloons also have generated an expanding campaign to thwart any Israeli concessions on Jerusalem, however.

"It's been the capital of the Jewish people from the time of King David more than 3,000 years ago," Israeli opposition leader Benjamin Netanyahu said. "Jerusalem has been the beating heart of the Jewish people. Now there are those who are saying, 'Let's divide this heart.' "

While Olmert's critics oppose the idea of ceding outlying Arab neighborhoods, they're more concerned that he might agree to turn over parts of the Old City to the Palestinians. In a letter last month to Jerusalem city council members, Haim Ramon, a top Olmert deputy, said Israel should be prepared to cede some control of the Old City.

Ramon endorsed the long-standing idea of creating a special authority to oversee the heart of the territorial conflict: the so-called "holy basin," which includes the Western Wall of the Second Temple, considered the holiest site in Judaism, the ground above the wall that holds the Dome of the Rock, where Muslims believe that Muhammad made a nighttime journey to heaven in 621, and the Al Aqsa Mosque, the third holiest site in Islam, after Mecca and Medina.

At Camp David, the two sides discussed handing control of the mosque and dome, along with the Old City's Muslim and Armenian quarters, to the Palestinians.

Resurrecting that idea would create an uproar. Polls show that a strong majority of Israelis oppose it.

"There is only one place that Jews face when they are praying all over the world," said Israeli political leader Natan Sharansky, a former Soviet dissident. "There is only one place that is mentioned in daily prayers which is the aim of every Jew. You cannot bargain about your identity."