Israel's divided Cabinet on Sunday narrowly approved a U.S.-backed peace "road map" that calls for the creation of a Palestinian state (search) by 2005.
But Israel did leave itself a loophole.
The Cabinet approved steps outlined in the peace plan, but it didn't approve the document itself. That could allow Israel to back away from parts of the proposal. The Cabinet also affirmed Israel's objections to more than a dozen points of the plan, including a provision to discuss the fate of Palestinian refugees.
The White House welcomed the endorsement of the peace proposal and prepared to send President Bush to Egypt and Jordan in early June to advance the process.
"We look forward to working with all parties in the region to realize the vision of peace laid out by President Bush in his June 24 (2002) speech," Reuters quoted White House spokesman Adam Levine as saying.
Israeli Prime Minister Ariel Sharon (search) overcame heavy opposition from far-right ministers and members of his own Likud party (search) by a vote of 12-7 with four abstentions in the 23-member Cabinet.
Sharon reluctantly embraced the plan on Friday amid intense U.S. pressure, after Washington assured him publicly that it would take into account Israel's reservations about some parts of the agreement.
"The time has come to say yes to the Americans, the time has come to divide this land between us and the Palestinians," Sharon was quoted as saying Sunday in the Yediot Ahronot Israeli daily.
The development could increase the prospect of a meeting involving President Bush, Israeli Prime Minister Ariel Sharon and Palestinian Prime Minister Mahmoud Abbas.
A Palestinian official said Palestine's prime minister and Sharon could meet as early as Monday to discuss the next move.
Even before Sunday's approval of the peace plan by the Israeli Cabinet, there was discussion of a possible meeting in the Egyptian resort Sharm el-Sheik among Bush, Sharon and Abbas.
Bush leaves Thursday for talks with Russian President Vladimir Putin and then a summit in France of world powers; the Middle East meeting could follow the Group of Eight gathering.
Democratic Senator Joe Lieberman of Connecticut urged the administration to become more closely involved in the peace process and said the president should go ahead with the meeting.
"The Bush administration has effectively been disengaged from the ground in the Middle East, and when that happens, nothing good will happen between the Israelis and the Palestinians," Lieberman told Fox News Sunday.
"We're indispensable there. They need us because we're the only one they trust," said Lieberman, who is seeking his party's 2004 presidential nomination. "There's a moment of opportunity here."
The Israeli prime minister told his Cabinet ministers during the six-hour meeting Sunday they needed to approve the plan to pull the nation out of its economic recession. He also reassured them he would not back away from any of the government's objections, participants said.
Commentator Hemi Shalev, writing in the daily Maariv before the meeting, called the vote a "historic decision that no left-wing government dared to make, which mandates the establishment of a Palestinian state."
The Palestinians accepted the three-phase "road map" to peace last month, immediately after it was presented, but the Israelis had major objections.
Palestinian officials cautiously welcomed the vote.
"We look positively on this decision. This is what the Palestinian Authority was asking for since we received the road map," Palestinian Information Minister Nabil Amr said. "The Israelis must implement their obligations without preconditions and without any changes."
Israel demanded, among other things, that a Palestinian crackdown on militias precede any steps by Israel. Sharon also insisted that the Palestinians drop without further discussion a demand for the "right of return" of Palestinian refugees to Israel.
On Friday, the United States declared that it would take the Israeli requests into account but has also said there would be no changes in the road map.
The road map's first phase calls for Palestinians to rein in militants and Israeli troops to withdraw from Palestinian towns.
Sharon had faced strong opposition within his four-party coalition, consisting of his Likud, the moderate Shinui party (search) and two right-wing blocs, the National Union and the National Religious Party.
Both right-wing blocs oppose the peace plan but intend to remain in the coalition.
Sharon faced resistance even within Likud, and met with his party's ministers before the cabinet meeting to appeal for their support.
Even some of those who voted in support of the plan said they had serious reservations about the road map but did not want to alienate the United States.
"I think the document is not a good one, but we have to choose when we battle the U.S., and now is not the time," Deputy Prime Minister Ehud Olmert told Israel Radio.
It was not clear whether Sharon's decision to go along with the road map was just a tactical move.
Israeli media quoted Sharon's advisers as saying Sharon did not want to be seen as turning down U.S. requests, but felt Israel was not likely to have to make painful concessions because he expected the Palestinians would fail to carry out their obligations under the plan.
The Palestinians have demanded Israel accept the road map unconditionally.
"We do not accept any buts," Palestinian Prime Minister Mahmoud Abbas (search) said Saturday in an interview with Egyptian state television. "The road map must be accepted as it is, from A to Z, with all its conditions and all its stages, and any changes to the text will definitely not be accepted."
The road map incorporates a previous proposal by Saudi Arabia that envisions Israeli withdrawal from territory it captured in the 1967 Mideast war -- the West bank, Gaza Strip, Golan Heights and east Jerusalem -- and the establishment of an independent Palestinian state with its capital in Jerusalem, all anathema to the Israeli right.
Israel has declared sovereignty over all of Jerusalem, where Palestinians make up about one-third of the population of 600,000.
Sharon reiterated his belief that a Palestinian state was inevitable.
"No one can teach me about these areas," Sharon said, according to Yediot. "I am no less connected to these lands that we will have to leave when the time comes than those who speak in such lofty terms. But you have to be realistic."
Sharon has said he envisions a Palestinian state in about half the West Bank with no Palestinian foothold in Jerusalem.
Even with the Israeli Cabinet approval, disputes with the Palestinians could resurface in the plan's first stage.
Militants have staged six attacks on Israelis in a week, killing 12 Israelis and wounding dozens. The Israeli army killed two Palestinians -- one Friday and one Saturday -- and raided the Tulkarem refugee camp in the West Bank.
Israel has said in the past it would only begin implementing the plan after the Palestinians crack down on the militias that have killed hundreds of Israelis in 32 months of fighting. Abbas has refused to make a move against militants before the adoption of the road map.
The Associated Press contributed to this report.