The Arab world displayed rare unity yesterday when the leaders of more than twenty countries endorsed a land-for-peace deal that would guarantee normal relations with Israel if it withdraws from all occupied territories and recognises Palestinian statehood.

After two days of discussions in Riyadh, the assembled monarchs and presidents agreed to relaunch a plan first floated in 2002 that was designed to end six decades of Arab-Israeli conflict.

The offer, which will be formally presented and promoted at follow-up talks next month, calls for Israel to withdraw from territories captured in the 1967 Six-Day War and for the creation of a Palestinian state in the West Bank and Gaza Strip with East Jerusalem as its capital. It calls for a “just” solution to the plight of millions of stateless Palestinian refugees.

The proposal was presented by Mahmoud Abbas, the Palestinian President, in his address to the summit, with Ismail Haniyeh, the Prime Minister and leader of Hamas, behind him. “I reiterate the sincerity of the Palestinian will in extending the hand of peace to the Israeli people . . . We should not waste more chances in the history of this long and painful cause,” Mr Abbas said. “We hope our summit will result in the formation of an Arab committee headed by the Saudi Arabian monarchy, the head of the summit, to follow up implementation of the Arab initiative.”

When the offer was first made to Israel five years ago, it was rejected by Ariel Sharon, then the Prime Minister, whose Government was struggling to contain a spate of suicide bombings by Palestinian militants.

While the Israelis do in principle support the concept of land for peace with the Arabs, they are opposed to relinquishing all the West Bank and Arab East Jerusalem and any agreement that would allow millions of Palestinian refugees to return to their homeland, now Israeli territory.

The terms of the Arab have not improved, but the political climate in Israel has changed. A government spokeswoman yesterday described the initiative as “interesting and as a possible basis for dialogue”.

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