Prime Minister Ariel Sharon has suggested a willingness to trade some Israeli-Arab population and land to the Palestinians in return for the land upon which Jewish settlers live in the West Bank, a senior Israeli official said Tuesday.

The official stressed that any such move would have to be accepted by Israeli Arabs (search) and come only as part of a final treaty with the Palestinians.

However, the idea threatened to arouse the deepest fears of Israel's Arab minority and was immediately criticized by an Israeli Arab leader.

Roughly 20 percent of Israel's 6.6 million citizens are Arabs. Unlike their Palestinian counterparts in the West Bank and Gaza, which Israel captured in 1967, Israelis Arabs have the right to vote, receive Israeli social services and can work inside Israel.

Relations with the Jewish majority, however, are often tense. Israeli Arabs have higher unemployment rates and lower incomes than Jews, and complain of frequent discrimination.

In October 2000, Israeli police killed 13 Israeli Arabs during riots that followed the outbreak of Israel-Palestinian violence.

Sharon recently has floated a series of ideas aimed at reducing "friction" with the Palestinians. The possibility of placing some Israeli Arabs under Palestinian control is one of those ideas, Israeli officials said.

In return, Israel would seek parts of the West Bank, where more than 200,000 Israeli settlers live among some 2 million Palestinians.

On Tuesday, Sharon was quoted in the Maariv daily newspaper as saying he is examining a possible population exchange with the hope of drawing a border between Israel and a future Palestinian state.

"I asked that it be examined legally. It is a complicated problem. I don't have an answer on the matter yet, but I am certainly checking it," he told the newspaper.

The senior Israeli official said on condition of anonymity that exchanging populations is "an old method that has been used elsewhere."

"It's not a plan for now," the official stressed. "It will only be on the agenda when there is an agreement between the two sides ... If we come to an agreement with the Palestinians, then it will be raised."

Ahmed Tibi (search), an Israeli Arab lawmaker, opposed the idea, saying, "We are talking about a dangerous, antidemocratic suggestion, which will bring about a schism between the state and its Arab citizens."

Residents of Israel's Arab towns "are not pawns that Sharon can play with," he said.

Sharon has said repeatedly in recent weeks that he plans to take unilateral steps in the West Bank and Gaza — such as dismantling some Jewish settlements (search), redeploying troops and imposing a boundary — if there is no progress in peace talks with the Palestinians.

Sharon confirmed Tuesday that his unilateral plan would include the removal of virtually all Jewish settlements in the Gaza Strip.