Palestinian leaders asked the U.S. to support a demand that the Palestinian Authority be allowed to open official representative institutions in eastern sections of Jerusalem, including a sanctioned headquarters in Israel’s capital, WorldNetDaily has learned.

Political sources in Jerusalem said Prime Minister Olmert is studying the request.

The opening of PA offices in Jerusalem would serve as a major statement that the city would become the capital of a future Palestinian state, said senior Palestinian negotiators speaking to WND.

In line with previous Israeli-Palestinian accords, the PA until now has been barred from conducting political activity in Jerusalem, although it maintained an office, called Orient House, in an eastern Jerusalem neighborhood that previously functioned as a de facto PA headquarters.

Orient House was closed down by Israel in 2001 following a series of suicide bombings in Jerusalem and information that indicated it was used to plan and fund terrorism.

Thousands of documents and copies of bank certificates and checks captured by Israel from Orient House showed the offices were used to finance terrorism, including direct payments to the Al Aksa Martyrs Brigades terror group.

Palestinian officials said they are urging the U.S. to support what they said is a key demand, allowing the PA to open official institutions and reopen Orient House – which this time around would serve as what they called their sanctioned “Palestinian White House” in Jerusalem.

Olmert to Allow ‘Return’ of Arab ‘Refugees’

Prime Minister Ehud Olmert agreed in principle to allow a number of Palestinian Arabs living in what the United Nations terms refugee camps to enter Israel as part of an Israeli-Palestinian accord, a senior Palestinian negotiator told WND.

Palestinians have long demanded the “right of return” for millions of “refugees,” a formula Israeli officials across the political spectrum warn is code for Israel’s destruction through flooding the Jewish state with millions of Arabs, thereby changing its demographics.

Allowing any number of so-called Palestinian refugees to enter Israel would serve as an admission on Israel’s part that millions of Palestinians living in UN-maintained camps are indeed refugees and have a legitimate right to live in Israel.

The Palestinian negotiator, speaking on condition of anonymity, said Olmert’s team agreed in principle to let a limited number of Palestinians living in UN-maintained refugee camps into Israel in a series of phases that could take up to 15 years.

Though the negotiator said an exact number had not yet been determined, he indicated it could be as many as 20,000 Palestinians living in UN camps, with an initial phase of several hundred entering Israel within one year of an agreement. He said the first batch of entering Palestinian Arabs would consist of a sampling from the oldest residents of various UN camps. David Baker, a spokesperson for Olmert, had no comment on the report.

Aaron Klein is Jerusalem bureau chief  for WorldNetDaily.com. He appears throughout the week on leading U.S. radio programs and is the author of the recently published book “Schmoozing with Terrorists.”

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Aaron Klein is the Jerusalem bureau chief for Breitbart News. Visit the website daily at www.breitbart.com/jerusalem. He is also host of an investigative radio program on New York's 970 AM Radio on Sundays from 7 to 9 p.m. Eastern. His website is KleinOnline.com.