The Palestinians and Israelis have agreed to the principle of swapping land in any peace deal, Palestinian President Mahmoud Abbas told reporters in Ramallah on Saturday.

This is the one concrete advance made public following the launch of indirect peace talks between the two neighbors that took place last week.

U.S. special envoy to the Middle East George Mitchell is heading the proximity talks, which at this stage are between Abbas and Israeli Prime Minister Benjamin Netanyahu.

While the parties agreed to the principle of a one-for-one land swap, the amount of land the parties will exchange is a point of some contention.

WHY A LAND DEAL?

The international community headed by the United States wants to see a Palestinian state created in the West Bank, East Jerusalem and the Gaza Strip. That area is based on Israel's borders as they were on the eve of the 1967 Six Day War.

However, in the interim some 250,000 Israelis have moved into the West Bank and live in towns and villages known overseas as the settlements. The presence of settlers in the occupied territories is seen as a major obstacle to any peace deal.

The Palestinians and Israelis agreed that the first topics on the table last week would be territory and security. The Palestinians want the focus to be on the land issue, while Israel believes its own security should be paramount.

In order for any form of deal to go ahead, the Americans say it must be based on the 1967 borders but with any changes being agreed by the parties. That is another way of saying that some of the largest settlement blocs will likely remain in Israeli hands.

As a result, according to Abbas, the Israelis have agreed to exchange land in sovereign Israeli territory for any settlements that remain in Israeli hands in the West Bank.

The debate is over exactly how much land should be exchanged. In the ideal scenario the Palestinians would like to see that figure being as close to zero as possible. The smaller the territory exchanged the closer the borders will be to those of 1967.

It is reported that the Palestinians are prepared to exchange anywhere from 1.9 percent to 4 percent of West Bank land for the same amount in Israel. The 1.9-percent figure was initially made public when the Palestinians were negotiating with then Israeli prime minister Ehud Olmert back in 2008.

For their part the Israelis are demanding a 6.5-percent land swap, meaning that more settlements would remain in Israeli hands after any peace agreement.

THE FACE OF THE MAP

The Palestinians would likely take land in three areas of Israel adjoining the West Bank: to its south, southwest and west, according to Oren Yiftachel, a professor of political geography at Ben-Gurion University of the Negev.

That land would not only have to be the same size as any retained by Israel but also of the same quality.

Yiftachel was involved in drawing up such maps during the Taba talks in January 2001. He believes if and when there is a final agreement on borders, it will be based on those maps, which examined land swaps of anywhere from 1 percent to 8 percent.

Dealing with a 4-percent deal would be much easier for Israel than a 1.9-percent arrangement. Not only would it be more palatable for Netanyahu's hawkish coalition partners, but it would also make the evacuation process far less painful. The more people Israel can leave where they presently reside, the less political upheaval there will be. It will also mean fewer clashes between settlers and Israeli security personnel.

Nevertheless, most settlements will have to be evacuated in any deal, Yiftachel told Xinhua on Sunday, possibly including one or two of the largest settlements such as Ariel with its just shy of 20,000 residents. If there is a warm peace, then a place like Ariel could fall inside Israel with the border running out the town quite literally "along the width of the asphalt," as Yiftachel put it.

Similarly, if the Palestinian state comes into being through an amicable solution, some Israeli villages may remain in their current locations but under Palestinian rule, he suggested.

Another question most likely not yet addressed is what would become of the empty homes of the settlers. Yiftachel said it would be a pity and a waste to see those homes demolished. When Israel left Gaza unilaterally in 2005 Palestinians destroyed their houses rather than hand them to Palestinian families.

PESSIMISM DESPITE AGREEMENT

Netanyahu on Sunday denied the reports that the Palestinian Authority is willing to make "big concessions" to Israel on the issue of the future Palestinian state's borders. The prime minister has reportedly urged his ministers not to speak to the media about the contents of the talks, with civil servants under similar instructions.

Many analysts believe that the longer the politicians remain silent, the greater the chances that the sides are making progress, but despite that, pessimism still pervades.

"The devil is in the details, the principles are easy. This is not sufficient," said Ephraim Inbar, director of the Begin-Sadat Center for Strategic Studies near Tel Aviv.

Yiftachel believes that many of the details have already been worked out with regard to the borders but he is of the opinion " that there needs to be a change of disc to one of peace and cooperation" in order for many of the proposals to work.

Like Inbar, Yiftachel realizes that any progress made last week was only at the most initial of stages. He describes it as "a slightly encouraging sign in a situation that is quite gloomy and full of despair."