The Obama Administration is demanding that Israel hand over more West Bank land to exclusive PA control, including the Abu-Dis area adjacent to Jerusalem, Palestinian sources told Ynet Thursday.

According to the US vision, the move will take place as part of reverting to the state that prevailed in the West Bank before the outbreak of the last Intifada.

According to the sources, the American plan calls for Abu-Dis – where Palestinian government institutions were previously established– to fall under full Palestinian sovereignty. The possibility of the area serving as a future Palestinian capital has already been discussed in the past.

Other demands made by the US include the release of about 2,000 prisoners by Israel, as well as significant gestures pertaining to daily life in the West Bank, the Palestinians said.

"The most significant demand is to restore the situation to what it was on the eve of the Intifada," one source said.

Peace talks with Syria?

The Palestinians added that President Obama also demanded that Netanyahu renew peace talks with Syria, as part of an effort to promote a comprehensive regional move that would assist in neutralizing Iran and forming a broad Arab anti-Iranian coalition.

PA officials estimate that the US has decided to present Netanyahu with the equation mentioned at the beginning of President Obama's term in office – Bushehr for Yitzhar", implying that Israel's cooperation in the West Bank is required in order to ensure American support against Iran. However, the Palestinians said that the US is not only setting its sights on isolated settlements such as Yitzhar, but also wishes to see a construction freeze in areas annexed to Israel.

"For the first time, we're hearing a clear timetable from the Americans," a Palestinian official said. "They wish to limit the negotiations to two years, which are supposed to conclude with the establishment of a Palestinian state in line with the 1967 borders with Jerusalem as its capital."

"The Americans started to understand what we've been saying for a while now – that there is one side which isn't a partner, and that's the Israeli side," he said.

For the time being, Israeli officials have refused to comply with the abovementioned demand.

Livni pressed

The Palestinians also said that members of Israel's political opposition have been signaling the possibility of an upcoming change in government. In a recent meeting between Knesset Member Haim Ramon and senior Fatah figure Mohammad Dahlan, the MK said that Netanyahu's situation is grave and that diplomatic and political developments may prompt a change of government in Israel, the Palestinians said.

Ynet also learned that US Administration officials have been exerting pressure on Kadima Chairwoman Tzipi Livni, who recently visited Washington, asking her to consider the possibility of joining the government should the opportunity arise in light of recent developments.