The plan offered up to the United States, Russia, the United Nations and the European Union includes a "sovereign Palestinian state, independent, and demilitarised" with "minor modifications of borders where necessary".
Palestinians have submitted a response to the controversial US Mideast plan, which sees parts of the occupied West Bank being annexed by Israel, Palestinian Prime Minister Mohammed Shtayyeh said on Tuesday.
"We submitted a counter-proposal to the quartet a few days ago," he said, referring to the United States, Russia, the United Nations and the European Union.
He said that it proposed the creation of a "sovereign Palestinian state, independent and demilitarised" with "minor modifications of borders where necessary."
Turning the heat on Israel
At a news conference, Shtayyeh said Israel must now "feel the heat of international pressure."
European states, Shtayyeh said, were debating "sanctions on Israel and freezing association agreements, as well as cancelling some research programmes" and "recognising Palestine" as a state in the West Bank and Gaza.
Most countries view Israel's settlements on occupied land as illegal. Israel disputes this. Palestinians now exercise limited self-rule in parts of the occupied West Bank while Palestinian group Hamas rules tiny Gaza.
But Shtayyeh said the 27-nation European Union's consensus decision-making was "a bit complicated," and one or two countries were not in line with others on the issue.
Some European countries could formally recognise a Palestinian state but, according to an Israeli official, Germany would not be one of them.
"Germany even with annexation would not recognise a Palestinian state and is not going to support sanctions against Israel," he said.
Israel's 'very dangerous' plans could stoke violence
A top Russian diplomat said Israel’s "dangerous" plans to annex Palestinian territories could provoke further discontent and violence.
In the near future, the new coalition government of Israel "may begin practical steps" to implement its stated plans to annex Palestinian territories, said Mikhail Bogdanov, Russia’s deputy foreign minister on Tuesday.
"We believe that such a development would be very dangerous. We agree with the assessments and warnings in this regard, which are reflected in the latest decisions of the Arab League on this issue."
Russia remains committed to a two-state solution on the basis of international law, and wants to see direct Israeli-Palestinian talks launched under UN auspices, Bogdanov added.
German Foreign Minister Heiko Maas will travel to Jerusalem on Wednesday, with Israel intent on toning down Europe's reaction to its annexation plans.
Maas is the first foreign dignitary to visit since Prime Minister Benjamin Netanyahu formed a coalition government with his election rival Benny Gantz, although US Secretary of State Mike Pompeo had visited just days before the May 17 swearing-in.
Israel could take initial steps to annex its West Bank settlements and the Jordan Valley as soon as July 1, the same day Germany takes the rotating European Union presidency.
Top business partner
Europe is Israel's top business partner with trade totalling $34 billion last year, according to EU figures.
"It is the first visit since this new government is established," said Avi Nir, head of the Israeli foreign ministry's European section.
"It is a symbol of the strong and the unique relation that Israel and Germany are having, a symbol of the personal friendship of Heiko Maas towards Israel," he said.
The EU has not announced retaliatory measures against Israel as sanctions would need the approval of all 27 member states.
Mass won't visit Ramallah
The German diplomat will skip a trip to the West Bank city of Ramallah, headquarters of the Palestinian Authority, due to a lack of time and coronavirus measures, Berlin says.
Maas will instead hold a video conference with Palestinian PM Shtayyeh from the Jordanian capital Amman, where he will meet the country's Foreign Minister Ayman Safadi.
Jordan stands strongly opposed to annexation in the West Bank, home to 450,000 Israeli settlers and 2.7 million Palestinians, and has warned it could spark a conflict.
OIC to discuss Israel's annexation plans
The Organization of Islamic Cooperation (OIC) will hold a virtual meeting at the level of foreign ministers over Israel’s annexation plans of Palestinian territories, the Turkish Foreign Ministry said on Tuesday.
The meeting on Wednesday will be held via video-conferencing and with the participation of Turkish Foreign Minister Mevlut Cavusoglu, the ministry said in a statement on its website.
During the meeting, joint actions within the OIC to avert Israel's annexation attempts of Palestinian territories will be discussed, the statement added.