Israel has agreed to a proposed formula for new peace talks with the Palestinians under which the border of their future state would be along the lines that existed before the 1967 Middle East war, but with agreed land swaps, an Israeli official said on Thursday.

The official said that, were the Palestinians to accept the formula, it would be announced by U.S. Secretary of State John Kerry, who would also describe the future Palestine existing alongside a "Jewish state" of Israel.