jan 1, 1981 - Saudi Arabia puts forth two-state plan

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Saudi Arabia put forward a plan based on a two-state settlement to the conflict with support from the Arab League.

Israeli analyst Avner Yaniv describes Arafat as ready to make a historic compromise at this time, while the Israeli cabinet continued to oppose the existence of a Palestinian state.

Yaniv described Arafat's willingness to compromise as a "peace offensive" which Israel responded to by planning to remove the PLO as a potential negotiating partner in order to evade international diplomatic pressure.

Israel would invade Lebanon the following year in an attempt to undermine the PLO as a political organization, weakening Palestinian nationalism and facilitating the annexation of the West Bank into Greater Israel.

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