8 ¢ Reaffirm support for the resolution of the Israeli-Palestinian conflict on the basis of two states for two peoples and the right of the Jewish and Palestinian peoples to self-determination, without prejudice to the rights of all citizens and minority groups. Recall, in this context, U.N. General Assembly resolution 181 of 1947 that called for the establishment of a Jewish state and an Arab state. ¢ Acknowledge institutional and security reform, economic development and state-building efforts — especially in the West Bank, under the leadership of President Abbas and Prime Minister Salam Fayyad, which have helped lay the foundations for Palestinian statehood — and endorse the position articulated by the World Bank and the United Nations that the Palestinian Authority is “well positioned for the establishment of a state at any point in the near future.” ¢ Accordingly, support the establishment of an independent and sovereign Palestinian state on the basis of the 1967 lines with its capital in East Jerusalem in parallel with Israel’s recognized capital in West Jerusalem, and with mutually agreed territorial swaps and modifications, subject to negotiation — a state that will live side by side with Israel in peace and security. ¢ Recognize that extending the authority of a Palestinian state to the Gaza Strip will depend on effective control there by a legitimate Palestinian government that exercises authority in the West Bank, is committed to the Quartet principles and the Arab Peace Initiative and respects the commitments of the Palestine Liberation Organization. ¢ Call for both states to engage in good faith negotiations on the basis of this and previous relevant resolutions and agreements in order to resolve all outstanding issues between them, beginning with the issues of borders, settlements, water and security arrangements. Specifically, security arrangements — including multi-layered international, regional and bilateral guarantees — should confront HOUSE_OVER