Palestinian President Mahmoud Abbas on Wednesday suggested he would be willing to cede some West Bank territory to Israel under a final peace settlement, but only if the Jewish state compensates the Palestinians with a comparable piece of land.

Abbas' endorsement of a "border adjustment" came as Israeli and Palestinian negotiating teams have been trying to hammer out a joint vision for a future peace deal in time for a U.S.-hosted conference next month.

Abbas appeared to be setting the stage for talks on a land swap — in which Israel could retain part of the West Bank if it agrees to hand over part of its own territory to the Palestinians. In the past, the Palestinians have claimed all of the West Bank as part of a future independent state.

Also Wednesday, Israel agreed to grant residency permits to thousands of Palestinians who have been living in the West Bank on expired visitors' visas. Officials said the gesture was meant as a confidence-building measure as talks with Abbas heat up.

Olmert and Abbas have been trying to agree on a joint document outlining a future peace agreement, which they hope to present at next month's peace conference in Annapolis, Maryland.

In a televised speech, Abbas said the Palestinians claim a total of "6,205 square kilometers (2,400 square miles) in the West Bank and the Gaza Strip," Abbas told Palestine TV. It was the first time he has given a precise number for the amount of land he is seeking.

But at the same time, Abbas left the door open for a land swap. "A border adjustment, on the basis of the same quality and the same amount, we have no objections," he said.

Palestinian officials confirmed that Abbas would be willing to adjust his claims, as long as they end up with the same amount of land.

The borders of a Palestinian state are one of the core areas of dispute, and a land swap could be a creative solution. It remains unclear, however, how far Abbas would be willing to go.

Israel is seeking to retain parts of the West Bank and east Jerusalem. In the speech, Abbas said east Jerusalem — which is home to Jewish, Christian and Muslim holy sites — must be the Palestinian capital.

Israeli government spokeswoman Miri Eisin declined to comment on the substance of negotiations. "The teams have started the process, which we sincerely hope will lead to full negotiations," she said.

Despite Abbas' tough public stance, aides to Abbas said he has agreed to the principle of a land swap in his talks with Olmert. This would allow Israel to annex the West Bank area where the settlement blocs are located.

The aides spoke on condition of anonymity since they were not authorized to discuss sensitive diplomatic matters with the media.

In exchange for the West Bank land, Israel is reportedly considering transferring to the Palestinians a strip of area between the Gaza Strip and West Bank to allow for a connection between them. About 40 kilometers (25 miles) of Israeli territory separates the two Palestinian territories.

Abbas said the joint statement at the conference must deal with the main hurdles preventing a final peace agreement.

"The international conference must include the six major issues that are Jerusalem, refugees, borders, settlements, water and security," Abbas said.

Meanwhile, Israel said it expects to complete a list of 5,000 Palestinians who will receive the residency permits ahead of the Muslim Eid el-Fitr holiday later this week. Shlomo Dror, an Israeli army spokesman, said further lists will be approved in the future.

Over the past decade, tens of thousands of Palestinians who were living abroad returned to the West Bank and Gaza on visitors' visas to join spouses or other relatives, or to open businesses. At the time of their return, peace talks were progressing, and many expected an end to the Israeli-Palestinian conflict.

But after fighting broke out in late 2000, Israel stopped renewing the visitors' visas, forcing people to stay in the Palestinian territories or risk not being able to return if they traveled abroad.

Hussein al-Sheikh, a Palestinian official overseeing the contacts, confirmed Israel had informed him of the decision. But he said West Bank Palestinians were only allotted 3,500 permits. Israel rejected Palestinian demands to give permits to 1,500 people in Gaza.

In all, there are an estimated 20,000 Palestinians in the West Bank on expired tourist visas. The order doesn't apply to an estimated 20,000 Palestinians in the Gaza Strip, which is controlled by the Hamas militant group.

Also Wednesday, Israeli troops shot and killed a Palestinian militant in Nablus affiliated with Abbas' Fatah party and injured another, members of the armed group said.

Witnesses said the Israeli soldiers entered Nablus' Old City, known as a militant stronghold, disguised in Palestinian security forces uniforms and carrying rifles typical of the forces. Israeli military officials said troops fired toward two armed men, killing one and injuring another.