Foreign Minister Avigdor Liberman said Sunday he would not agree to any peace agreement with the Palestinians without the exchange of the “triangle” area southeast of Haifa, which is heavily populated by Israeli Arabs, for West Bank areas populated primarily by Jews, commonly known as “settlement blocs.”

Liberman emphasized that he supports the creation of a Palestinian state and appreciates the current efforts of US Secretary of State John Kerry to reach a final status deal, but added that he would not agree to an agreement that would allow “even one” Palestinian refugee to return to Israel.

He also suggested that Kerry’s positions on the peace process, including his understanding of Israel’s security needs and its demand to be recognized as a Jewish state, were the best offer Israel could expect from the international community. “Any alternative proposals brought forward by the international community will suit us much less,” he said.

Liberman spoke at the opening of the Foreign Ministry’s Ambassadors Conference for heads of Israeli missions across the world. At the conference, which took place at the Foreign Ministry headquarters building in Jerusalem, Liberman sounded decidedly less hawkish than in recent years. The foreign minister who has insisted in the past that a peace agreement with the Palestinian Authority was unattainable and accused PA President Mahmoud Abbas of “political terrorism,” on Sunday sounded as if he accepted the idea that a Palestinian state will be created in the near future.

“It’s appropriate to talk about an issue that is not exactly politically correct,” Liberman said, in the middle of a lengthy foreign policy address. “I’m talking of course of the exchange of territory and populations. And if someone thinks that I’m talking about an exchange of territory and ‘the triangle’ and Wadi Ara [both areas mostly populated by Israeli Arabs] – indeed, that’s what I am referring to.”

His party, Yisrael Beytenu, will not agree to a peace agreement that does not include such a territorial exchange, which would place a large portion of Israel’s Arab population centers within the future Palestinian state, and most of the West Bank’s Jews within the Jewish state. Liberman emphasized that he was not talking about a population transfer. “Everyone will stay in their own houses, in the same places. Just the borders will move toward what is today [the highway along Israel's eastern spine] Route 6, more or less.”

The redrawing of Israel’s borders to exclude major Arab population centers that lie on the Israeli side of the Green Line, and which are populated by longtime Israeli citizens, has long been Liberman’s policy. In the past, Prime Minister Benjamin Netanyahu has rejected this approach.

The area known as “the triangle,” located in the Sharon plain, contains mostly Arab-populated towns and cities such as Kafr Qara, Umm al-Fahm, Tayibe and Qalansawe. It was to have come under Jordanian rule in the arrangements that saw the establishment of the State of Israel but was ultimately included in Israeli sovereign territory under the 1949 armistice agreements because of Israeli security demands. Israel instead ceded territory that had been earmarked for Israeli sovereignty in the area of the southern Hebron hills.

Last week, unnamed sources told Maariv that the “triangle” plan, involving some 300,000 Israeli Arabs living on land that would become part of a new Palestine, had come up during talks between Israel and US officials at various levels, including at least one occasion when very senior officials, Kerry among them, were in attendance. Israeli legal officials have begun investigating legal aspects of such an arrangement, the newspaper said. It added that the Americans have apparently not assented to the idea, and that the Palestinians are likely to reject it.

The idea is aimed at addressing two central issues in a possible peace agreement: first, land swaps between Israel and a Palestinian state that would enable Israel to expand its sovereignty to encompass major West Bank settlements, while compensating the Palestinians with territory that is currently part of sovereign Israel; and second, preserving Israel’s Jewish majority.

Liberman on Sunday also warned of millions of Palestinian refugees who would move to the future Palestinian state as soon as it is created. “There’s no doubt that the Palestinians who today live in Lebanon, Syria and Jordan will all consider moving to the Palestinian state,” he said. Currently an estimated 2.4 million Palestinians live in the West Bank, with almost 3 million in the three countries he mentioned. “Let’s take into consideration that the Palestinian economy is not like the economy of Switzerland or Norway,” he said. “They need to live and work somewhere. What will happen then? What kind of pressure will be exerted on Israel then?”

Liberman said he rejected a Palestinian “right of return” even on a theoretical basis. “I will not sign any agreement that includes any right of return into Israel, not even a single person. Because if you keep that option open, even theoretically or on a limited scale, it will invite a lot of pressure. And this pressure will be very heavy.”

It was important to look at the day after the signing of a possible peace agreement, Liberman said.

“It is important [to know] if we can live with the pressure that will be exerted on us, from outside and from within. Will a signature on the agreement with the Palestinians bring about an end to pressure on Israel from international community, or instead of so-called settlements, will those who criticize us over the settlements find something else to pressure us about?” Liberman said.

Indeed, the very same people who currently decry Israel over settlement expansions are already preparing to challenge Israel on other issues, such as the Bedouin or Israel’s Jewish communities in the Galilee. “These are exactly the same people,” he said. “It is clear that they are not about to calm down. Even if we sign a peace agreement and the issue with the settlements is solved, they’re already preparing the next issues.”

Earlier in this speech, Liberman praised Kerry for his efforts to bring Israelis and Palestinians to sign a final status deal, and said that there was value in the negotiations even if they did not lead to a deal. While he said that Israel needs to look for other partners across the globe, Jerusalem’s relations with the United States are the “cornerstone” of Israel’s foreign policy.

‘I would like to express genuine appreciation for the efforts of Secretary of State John Kerry, who works night and day and uses all his experience trying to end our conflict with the Palestinians,” the foreign minister said. “It needs to be understood that any alternative proposals brought forward by the international community will suit us much less.”

Stuart Winer contributed to this report.