Egypt may intervene in the Middle East peace talks between Israel and Palestine with a proposal to segment Jerusalem, whose status is the key to resolving the issue, senior Liberal Democratic Party member Koichi Kato said Saturday during a 10-day, four-nation trip to the Middle East.

Kato, former secretary general of the Liberal Democratic Party, said Egyptian Prime Minister Atif Muhammad Obeid told him Egypt has been urging both sides to come up with proposals to demarcate the holy city as a means to achieve peace.

"Egypt is also having its religious scholars research the situation. We think perhaps we should make a proposal," Obeid was quoted as saying in his meeting with Kato in Cairo.

Kato said he asked Obeid to ensure that Egypt makes efforts to "guide talks aimed toward a comprehensive peace agreement, which would include the participation of Palestine, Syria and Lebanon."

He also assured Obeid that Japan will support the Middle East peace process, just as it has been helping groups in Cambodia.

The U.S.-mediated Middle East peace summit held last month at Camp David, Md., ended without agreement.

At issue now is a Palestinian plan to proclaim an independent Palestinian state on Sept. 13 -- the agreed deadline for concluding a final peace accord with Israel -- but Palestinian leader Yasser Arafat said Wednesday that the ruling Palestinian Central Council will reassess the plan.

Japan and other countries have urged Arafat not to declare an independent state without a peace agreement with Israel.

Kato will wrap up his Middle East trip Monday and return to Japan via London.