Secretary of State John Kerry said on Tuesday the Arab League's acknowledgment that Israelis and Palestinians may have to swap land in any peace deal was "a very big step forward."
Arab states appeared to soften their 2002 peace plan on Monday when Sheikh Hamad bin Jassim al-Thani, Qatar's prime minister and foreign minister, said the two sides could trade land rather than conform exactly to their 1967 borders.
His comment, made on behalf of an Arab League delegation, amounted to a concession to Israel. While it has been assumed for at least a decade that land swaps would be part of any peace deal, the Arab League had never explicitly embraced the idea.
"That is a very big step forward," Kerry told reporters at a news conference with Spain's foreign minister. "We're going to continue to march forward and try to bring people to the table despite the difficulties and the disappointments of the past."
Kerry has made no secret of his hope to revive peace talks, which broke down in 2010, but it remains unclear whether President Barack Obama will decide to back a major U.S. effort.
"This news is very positive," Israeli Justice Minister Tzipi Livni, a former foreign minister, told Israeli Army Radio on Tuesday. "It could allow the Palestinians to enter the room and make the needed compromises and it sends a message to the Israeli public that this is not just about us and the Palestinians."
Sheikh Hamad made his comments after Kerry met on Monday with him and the Bahraini, Egyptian and Jordanian foreign ministers as well as officials from Lebanon, Saudi Arabia, the Palestinian Authority and the Arab League.
The group sought to give a boost to the 2002 Arab League peace proposal that offered full Arab recognition of Israel if it gave up land seized in a 1967 war and accepted a "just solution" for Palestinian refugees.
"When I have been in Israel in recent days, a lot of people have asked me: What are the Arabs going to do? What is the Arab attitude towards peace at this point in time?" Kerry said.
"So the Arab community - and I think they should be thanked for this - saw fit to come here to the United States as a delegation of the Arab League to make it clear that they are relaunching the Arab Peace Initiative," he added.
Rejected by Israel when it was originally proposed at a Beirut summit in 2002, the plan has major obstacles to overcome.
Israel objects to key points, including a return to the exact 1967 borders, the inclusion of Arab East Jerusalem in a Palestinian state and the return of Palestinian refugees to what is now Israel.
The core issues that need to be settled in the more than six-decade dispute include borders, the fate of Palestinian refugees, the future of Jewish settlements on the West Bank and the status of Jerusalem.
Reporting by Arshad Mohammed; Editing by Eric Beech