The Palestinians are seeking billions of dollars in compensation from Israel for the past 32 years of occupation of the West Bank and Gaza Strip, and they are warning Israel that there can be no permanent peace accord until the capital of Palestine is established in East Jerusalem.
The expected unequivocal position on Jerusalem, and the unexpected demand for compensation, are included in a new working paper approved by the Palestinian Authority, as talks on a permanent peace treaty get into full swing this week in the West Bank city of Ramallah.
The Israelis and the Palestinians are currently at loggerheads over the delayed latest phase of Israeli land handovers in the West Bank, with the Palestinian President, Mr Yasser Arafat, rejecting the 5 per cent chunk of territory that Israel is proposing to hand over to his control.
With the two sides arguing over such relatively marginal issues, it seems increasingly hard to believe that they can agree on the framework of a permanent peace treaty by February, and actually sign the deal by September, as scheduled.
That treaty will have to resolve the status of Jerusalem, for instance, where, as the new Palestinian working paper underlines, the two sides have taken utterly conflicting opening positions. Israel is adamant that the entire city remain under its sovereignty; the Palestinian paper envisages a united city, but with clearly delineated Israeli and Palestinian sectors.
Israel will also doubtless reject the compensation demand, which seeks recompense for Israel's use of land, water and other natural resources in the West Bank and Gaza since 1967, and for damage to the Palestinian economy.
Another demand in the new working paper, for the dismantling of all Jewish settlements in the West Bank and Gaza Strip, also starkly conflicts with the Israeli opening position - which seeks to maintain blocs of West Bank settlement around Jerusalem, along the pre-1967 border and in the Jordan Valley.
Privately, some Palestinian officials concede that some of the approximately 150 settlements will remain in place. But they insist that the majority must be uprooted.
Settler leaders, by contrast, are adamant that every single settlement must stay put, and have warned the Israeli Prime Minister, Mr Ehud Barak, that a recent deal, under which 12 illegal settlements were evacuated, must not serve as a precedent.