JERUSALEM -- New details are coming out about President Barack Obama's Middle East peace plan. Reports indicate he wants to divide Jerusalem and give half to the Palestinians.
That comes just as Israelis mark the 42-year anniversary of Jerusalem's return to Jewish sovereignty during the Six-Day War.
Two major Israeli newspapers reported that Obama will propose redividing the city, with east Jerusalem becoming the capital of a future Palestinian state and the Old City coming under international control.
But a U.S. official told CBN News nothing definitive has yet been decided on Jerusalem.
Some expect Obama might outline his peace plan for the Middle East when he delivers a major address in Egypt next month.
The Jerusalem Day celebration on Friday marks the anniversary of the successful capture by Israeli soldiers of the Old City and the Temple Mount. For the first time in 2000 years, the city lay in the hands of the Jewish people.
During Jerusalem Day ceremonies, Vice Prime Minister Silvan Shalom vowed that "Jerusalem will not be divided," while The Jerusalem Post reported, Palestinian officials said east Jerusalem, including the Old City, would belong to a future Palestinian state.
The future of Jerusalem will likely be one of the most - if not the most - contentious issues in negotiations aimed at resolving the Palestinian-Israeli conflict.
In the meantime, U.S. Secretary of State Hillary Clinton warned of a major arms race in the Middle East.
"A nuclear-armed Iran with a deliverable weapons system is going to spark an arms race in the Middle East and the greater region. That is not going to be in the interest of Iranian security and we believe that we have a very strong case to make for that," she said.
Her warning came just hours after Iran announced a successful test of a missile with a range of more than 1,200 miles.