Israeli leaders are seriously considering a dormant Saudi plan offering a comprehensive peace between Israel and the Arab world in exchange for lands captured during the 1967 war, Defense Minister Ehud Barak said yesterday.

Barak said it may be time to pursue an overall peace deal for the region since individual negotiations with Syria and the Palestinians have made little progress.

Barak said he has discussed the Saudi plan with Prime Minister-designate Tzipi Livni, who is in the process of forming a new Israeli government, and that Israel is considering a response.

Saudi Arabia first proposed the peace initiative in 2002, offering pan-Arab recognition of Israel in exchange for Israel's withdrawal from Arab lands captured in 1967 — the West Bank, Gaza Strip, east Jerusalem and the Golan Heights.

The 22-member Arab League endorsed the plan last year.

The Israeli government has in the past described the plan as a good basis for discussion, but expressed some reservations.

"There is definitely room to introduce a comprehensive Israeli plan to counter the Saudi plan that would be the basis for a discussion on overall regional peace," Barak told Israel's Army Radio.

He noted the "deep, joint interest" with moderate Arab leaders in containing Iran's nuclear ambitions and limiting the influence of the radical Islamic Hezbollah movement in Lebanon and Hamas in Gaza.

Analyst Ghassan Khatib, a former minister in the Palestinian Cabinet, said that although the Israeli interest in the six-year-old plan was "a little bit late" the plan was still valid and offered the most promising potential way forward.

"I strongly believe that the Arab initiative is the best approach to peace between the Arabs and the Israelis," he told The Associated Press. "It fulfills all the legitimate objectives of Israel and those of the Palestinians and at the same time it has this regional dimension and it reflects one of the rare issues on which Arabs have consensus."