A confidant of Israeli Prime Minister Ehud Olmert said Monday that his government would support a division of Jerusalem, which is reportedly a key component of an Israeli-Palestinian declaration to be made at a US-sponsored Mideast peace conference next month.

As part of recent negotiations between the sides, Deputy Vice Premier Haim Ramon has proposed turning over many of the Arab neighbourhoods of east Jerusalem to the Palestinians. Ramon said the Palestinians could establish the capital of a future state in the sector of the city, which Israel captured from Jordan in the 1967 Mideast war.

In return, Israel would receive the recognition of the international community, including Arab states, of its sovereignty over Jewish neighborhoods and the existence of its capital there, Ramon said.