A revived Mideast peace proposal by Saudi Arabia represents progress in the Arab position, but all its elements need to be fully negotiated, Israeli Deputy Prime Minister Shimon Peres said Tuesday.

Peres, in Tokyo for a four-way "confidence-building" conference with the Palestinians, Jordan and Japan, said Israel rejects any preconditions on discussing the Saudi proposal to restart long-stalled peace efforts.

The plan calls for a full Israeli withdrawal from areas captured in the 1967 Middle East war, and the establishment of an independent Palestinian state. In exchange, Israel would receive full diplomatic recognition in the Arab world.

"As an Arab position, it is progress, and we would like to continue negotiations," Peres told reporters. "But it is the opening position, not yet the fallback," he said, noting any final agreement would differ from the original proposal.

An Arab summit in Saudi Arabia on March 28 to 29 is expected to revive the 2002 Saudi plan, which was rejected by Israel at the time. Israeli leaders are now showing renewed interest as talks with the Palestinians yield few results.

The plan represented progress over past Arab refusals to recognize Israel's right to exist, Peres said, adding, however, that tough issues such as refugees and the status of Jerusalem -- which both sides claim as their capital -- would have to be worked out in talks.