Prime Minister Benjamin Netanyahu’s senior coalition partner says that reaching a final peace agreement with the Palestinians is unrealistic at the current time and the sides should instead pursue an interim arrangement.

Finance Minister Yair Lapid’s assessment, delivered in a published interview yesterday just days before the arrival of US Secretary of State John Kerry, throws a contentious idea into the mix as the US searches for ways to restart peace talks.

It remains unclear whether the idea of a temporary arrangement will be raised during Kerry’s visit later this week. In March, American officials confirmed that an interim arrangement, while not their preference, was one of the ideas being explored.

With the gaps between Israel and the Palestinians on many key issues seemingly unbridgeable, pursuing a Palestinian state with temporary borders has emerged as an option in recent months, particularly among Israelis searching for a way out of the status quo. The Palestinians have repeatedly rejected this option, fearing an interim deal that falls short of their hopes will become permanent.

In order to allay Palestinian concerns, Lapid told the Yediot Ahronot daily that President Barack Obama should set a three-year timeline for determining the final borders of a Palestinian state. As a gesture to the Israelis, he also called on Obama to endorse the position laid out by President George W Bush in 2004, allowing Israel to keep some of the Jewish settlements it has built on occupied lands.

The issue of Jewish settlements has been at the heart of the current 4-and-a-half year impasse in peace talks. The Palestinians have refused to negotiate, saying that continued Israeli construction in the West Bank and east Jerusalem is a sign of bad faith. The Palestinians claim both areas and the Gaza Strip, all captured by Israel in the 1967 Mideast war, for their future state.

Most Israelis, including Netanyahu, think that the continued control over millions of Palestinians would spell demographic suicide for Israel, and that creation of an independent Palestinian state is essential to preserving Israel’s identity as a democracy with a Jewish majority.

“I believe in the two-state solution,” Lapid told Yediot. “In my opinion, there is nothing more dangerous than the idea of a bi-national state.”

At the same time, though, Lapid, like Netanyahu, rejects a full withdrawal to Israel’s 1967 lines.

Lapid favors a broad pullout from the West Bank, including the dismantling of many settlements, but believes Israel should hold on to major “blocs” along the Israeli frontier where the majority of settlers live.

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