UN Security Council Resolution 242, drafted to deal with the consequences of the 1967 war, left the outstanding issues of 1948 unresolved. For the first time, new Israeli conflict-resolution proposals that are in principle based on 242 directly involve Palestinian citizens of Israel. This essay explores these proposals, which reflect Israel's preoccupation with maintaining a significant Jewish majority and center on population and territorial exchanges between Israeli settlements in the West Bank and heavily populated Arab areas inside the green line. After tracing the genesis of the proposals, the essay assesses them from the standpoint of international law.