The US told Israel to 'earmark' land for a future Palestinian state, Ex-US Middle East envoy Jason Greenblatt told Israel's Army Radio, i24 News reported.
Greenblatt insisted that whilst US President Donald Trump's so-called 'deal of the century' allows Israel to take 30% of the West Bank for itself, the deal also stipulates that land should be 'earmarked' for a future state of Palestine, in return for US approval to begin annexation.
This comes after reports in Israeli media that the US asked Israel to hand half of Area C to the Palestinian Authority while applying its laws to the other half.
Area C is currently occupied by Israel and under Israeli security and civil control.
Trump's so-called peace deal has been criticised for favouring Israel heavily over Palestine.
The plan includes linking the Gaza Strip and West Bank via a tunnel.
Israel has announced its plans to annex swathes of the illegally occupied West Bank, bringing it fully under Israeli jurisdiction. However, there are no plans to afford Palestinians the same rights as Israeli citizens.
The international community has largely condemned the annexation plans, aside from the US, which is currently negotiating terms of greenlighting Israel's plans, but has expressed approval for the plan.