ABOUT two weeks ago Menachem Froman, the chief rabbi of this Jewish settlement perched on the edge of the Judean desert, had a dream.

In the dream, he recounted in an interview this week, he was sitting with the late Palestinian leader Yasir Arafat “as we used to.”

“It was like he was pushing me to continue in my efforts to make peace between our peoples,” he said.

Rabbi Froman, 63, is a founding member of Gush Emunim, the ideological, messianic settlement movement that sprang up after Israel’s conquest of the West Bank, with its biblical landmarks, in the 1967 war. He has been living here for 35 years, teaches at religious seminaries in Tekoa and in another West Bank settlement in the Hebron hills, and wears a black suit and white shirt, conventional Orthodox rabbinical garb.

But that is about where his similarity with other Jewish settlers in the West Bank ends.

Among his close friends, the rabbi counts not only Mr. Arafat, who was reviled by most Israelis by the time of his death in 2004, but also a wide array of Muslim sheiks. He believes in making peace with his Palestinian neighbors and has engaged in “thousands of hours” of dialogue, he said, with Palestinian leaders, including Mr. Arafat’s rivals in the militant Islamist group Hamas.

Rabbi Froman used to travel to Gaza for talks with Sheik Ahmed Yassin, the spiritual leader of Hamas who was killed in an Israeli missile strike in 2004 after his group spearheaded a years-long suicide bombing campaign that killed scores of Israelis.

The rabbi said he used to shout at the sheik and tell him, “you will go to hell because you are taking Islam, a religion whose name has connotations of peace, and turning it into a religion of terror.”

The sheik would reply that he was only defending himself, Rabbi Froman said.

He still maintains contact with figures in Hamas. And while he clearly has no following among his fellow West Bank settlers, he has many acquaintances in the Israeli establishment and has direct access to several leaders, including President Shimon Peres and senior figures in the Defense Ministry.

LAST February, together with a Palestinian journalist from Hebron, he drafted a comprehensive truce agreement for Israel and Hamas that called for the release of Cpl. Gilad Shalit, who has been held for more than two years by the Islamist group in Gaza, in exchange for a substantial number of Palestinian fighters, and eventually, the release of all prisoners on both sides.

The Hamas government in Gaza could not accept the deal because the Israeli government rejected it, Rabbi Froman said.

Next, he said, he has an intriguing proposition for President-elect Barack Obama. The idea is to bring a delegation of two rabbis, two sheiks and two bishops from Jerusalem and the Holy Land to bless the new president on Inauguration Day, an effort to rekindle faith in the possibility of peace.

“I believe that he was elected by God,” Rabbi Froman said of Mr. Obama. “I want to create an opening for God to perform a miracle here.”

Rabbi Froman, who was born in the Galilee, was pulling hard for Mr. Obama, posting clips on YouTube and praying for his victory at the Cave of the Patriarchs in Hebron on the day of the American election. Now, Rabbi Froman said, he wants to put some practical content into Mr. Obama’s concept of change.

It would be easy to dismiss Rabbi Froman, who peppers his speech with talk of miracles and references to mystical texts, as a maverick, an eccentric and a kook.

But the letter he sent to several of Mr. Obama’s policy advisers in late November outlining his proposal was co-signed by Gershon Baskin and Hanna Siniora, the Israeli and Palestinian executive officers of Ipcri, the Israel/Palestine Center for Research and Information, one of the most established nongovernmental peace institutes in the land.

Mr. Obama is “into symbolism,” said Mr. Baskin, explaining why he supported the initiative, adding, “We think it is really important that the Obama administration gets involved immediately” in the Israeli-Palestinian sphere.

Mr. Baskin describes Rabbi Froman as a “very esoteric kind of guy.”

“Maybe because he is so exceptional and authentic, a rabbi and a religious man, there are people in this country and around the world who listen to him,” Mr. Baskin said.

One of Rabbi Froman’s closest Hamas-affiliated associates in the West Bank declined, with profuse apologies, to comment publicly on their relationship. The circumstances were too sensitive, he said.

Rabbi Froman’s home in Tekoa is almost devoid of worldly goods. Other than shelves of well-worn holy books, the only ornaments in the sparsely furnished lounge are a series of small, unframed paintings, mostly of the local biblical scenery, by his wife.

“The Holy One tossed me into Tekoa,” he said, “because from the rooftops there is 2,500 years of Jewish history looking down on us.”

A settlement of about 250 families just south of Jerusalem, Tekoa has a reputation of being relaxed, with a mixed population of religious and non-religious Jews. It is in the shadow of the flat-topped hill of the Herodion, a fortress cum palace built by Herod the Great.

Biblical Tekoa was the home of Amos the prophet who, according to the rabbi, fought for social justice and against Jewish arrogance and pride. The letters of Shimon Bar Kochba, who led the Jewish revolt against the Romans from A.D. 132 until 135, were found in a valley nearby.

Rabbi Froman, who is active in interfaith circles, sees his mission, too, as fighting “Jewish arrogance.” He said he could comprehend why Israel, a modern, fast-developing state with liberal, sometimes decadent Western values, could be seen by more conservative Muslims as “a permanent insult.”

He mentioned that one of his 10 children lived in the desert canyon behind the settlement, in a cave. Another built a stone house with his own hands in Tekoa D, an unauthorized outpost of the settlement slated for removal.

As such, the settler rabbi’s vision of peace does not conform to the standard one of the past 20 years, involving the creation of a Palestinian state in a settlement-free West Bank and Gaza, with its capital in East Jerusalem.

He said he would refuse to leave his home in the case of such a deal. The government “has no right to uproot people from their homes,” he said.

Instead, because the Jews and Arabs are “so mixed up,” Rabbi Froman proposed the establishment of two countries without borders, or two states in one land.

“From all my long talks with the Palestinians,” he said, “I came to the conclusion that while the problem is also political, about control over territory and so on, the core of the problem is religious.”

The quest for peace “won’t succeed without a religious, spiritual basis,” he said.

So, contrary to the current Israeli position that the status of Jerusalem should be left until last because of its complexity, Rabbi Froman puts Jerusalem first in negotiations with the Palestinians.

“The key to peace is peace in Jerusalem,” he said, “to re-establish Jerusalem as the capital of peace in the world.”

Rabbi Froman envisages a shared Jerusalem where the Old City, containing the main sites sacred to Muslims, Christians and Jews, is ex-territoria, a Jerusalem that houses the headquarters for international institutions.

It sounds like utopia — and at this point, as realistic as anything else.