Palestinian negotiators offered in 2008 to cede vast swathes of annexed East Jerusalem in peace talks with Israel, Al-Jazeera news channel reported on Sunday, citing "secret documents".
The chief Palestinian negotiator, Saeb Erakat, however, questioned on the Doha-based channel, said the Palestinian leadership had "nothing to hide" and dismissed most of the report as "a pack of lies".
Al-Jazeera said the Jerusalem areas offered were where Jewish settlements have been built, including French Hill, Ramat Alon and Gilo, as well as the Jewish Quarter and a part of the Armenian Quarter in Jerusalem's Old City.
Israel, the Arab satellite channel added, offered nothing in return for what it called the "historic concession" from the Palestinians, in the documents which Britain's The Guardian newspaper said it was also leaking.
Al-Jazeera said the concessions came at a June 2008 meeting in Jerusalem between Condoleezza Rice, the then US secretary of state, the then Israeli foreign minister Tzipi Livni and the former Palestinian premier Ahmad Qorei, and Mr Erakat.
"This last proposition could help in the swap process," Mr Qorei is quoted as saying in the "Palestine Papers".
"We proposed that Israel annexes all settlements in Jerusalem except Jabal Abu Ghneim (Har Homa)," he said in the documents, as cited by the news channel.
"This is the first time in history that we make such a proposition; we refused to do so in Camp David," he added, referring to the US-hosted 2000 Camp David peace talks attended by the late Palestinian leader Yasser Arafat.
But "the Israeli side refused to even place Jerusalem on the agenda, let alone offer the PA (Palestinian Authority) concessions in return for its historic offer", the report said.
Mr Qorei told Ms Livni at the June 2008 meeting, however, there would be no concessions on Jewish settlements in the West Bank, according to the Palestine Papers.
The report comes as world powers seek ways to haul Israel and the Palestinians back to the negotiating table after direct peace talks broke down last September in a dispute over Jewish settlements.
The United States on Sunday said it was reviewing the "alleged Palestinian documents".
"We cannot vouch for their veracity," said Philip Crowley, the US State Department spokesman.
The Palestinians refuse to resume negotiations while Israel builds on land they want for a future state of their own.
In what it termed "shocking revelations", Al-Jazeera said it had obtained more than 1,600 internal confidential documents from a decade of US-brokered peace negotiations.
They were to be disclosed in installments on the channel and its website.
"We are offering you the biggest Yerushalayim in Jewish history," Mr Erakat is quoted as telling Ms Livni, using the Jewish name for the Holy City.
Mr Erakat also offered concessions on the status of Jerusalem's Temple Mount, which houses the Dome of the Rock and Al-Aqsa Mosque, the third holiest site in Islam, according to the Palestine Papers.
On refugees, he is said to have offered to accept the return of only 100,000 out of the Palestinians who fled at the establishment of the state of Israel in 1948 and their descendants, now numbering almost five million.
But Erakat scoffed at the reports.
"We have not gone back on our position. If we had given ground on the refugees and made such concessions, why hasn't Israel agreed to sign a peace accord?" he asked.
Observers said the Al-Jazeera report revealed little new as details of the land swap proposals had long been an open secret.
In Britain, The Guardian said on its website that the cache of confidential Palestinian documents obtained by Al-Jazeera was to be "shared exclusively" with the daily.
The documents also show how PA leaders had been "privately tipped off" about Israel's 2008-2009 war against the Gaza Strip ruled by the Islamist movement Hamas, the paper said.
"The overall impression... is of the weakness and growing desperation of PA leaders as failure to reach agreement or even halt all settlement temporarily undermines their credibility in relation to their Hamas rivals."
The Guardian said "the papers also reveal the unyielding confidence of Israeli negotiators".
The leaked documents were "drawn up by PA officials and lawyers working for the British-funded PLO negotiations support unit and include extensive verbatim transcripts of private meetings", it said.
Many of them had been "independently authenticated by The Guardian and corroborated by former participants in the talks and intelligence and diplomatic sources".
* Agence France-Presse