NEW YORK (Reuters) - Thermo Fisher Scientific Inc made a binding offer for Life Technologies Corp on Tuesday as private equity firms raced to finalize a consortium to take the genetic testing equipment maker private, several people familiar with the matter said.

Life Tech, with a current market value of more than $11 billion, has become an attractive target due to its strength in advanced diagnostics and gene sequencing and if Thermo Fisher were to prevail, the deal would make it a major player in the genetic sequencing market.

It would be also be by far its biggest deal since the $12.8 billion merger in 2006 of Thermo Electron and Fisher Scientific International that created the world's largest maker of scientific equipment and laboratory instruments.

Thermo Fisher met a bid deadline on Tuesday but private equity firms working on a joint bid missed it and were working late into the evening to secure the equity required to support an offer, the people said.

Blackstone Group LP, Carlyle Group LP and Singapore's state investor Temasek Holdings were in talks with KKR & Co LP about securing the required equity and finalizing a buyout consortium, the people said.

Life Technologies would likely accept an offer past the bid deadline to keep the process competitive, the people added.

Thermo Fisher is bidding more than $65 per each Life Tech share, two of the people said. While the exact price could not be learned, Thermo had been considering a bid of $65 to $70 per share, sources said last week.

The private equity group would likely bid close to $65 per share, two separate people said.

All the people asked not to be named because details of the auction are not public. Life Technologies, Thermo Fisher, KKR, Blackstone and Carlyle declined to comment while Temasek did not respond to a request for comment.

Shares of Life Tech ended up 1.3 percent at $66.19 on Tuesday, giving it a market value of $11.3 billion. They are up 33 percent so far this year on expectations of a possible deal, outperforming a 9.6 percent rise in the S&P 500 index.

At this level, Life Tech trades at 14.6 times forward 12-month earnings compared to an average 13.6 times for its peer group, according to Thomson Reuters data.

DANAHER, ROCHE

Carlsbad, California-based Life Tech, which has hired advisers to explore a sale, had also attracted interest from industrial and healthcare conglomerate Danaher Corp and drugmaker Roche Holding AG, people familiar with the matter told Reuters previously.

While their position could not be confirmed, one of the people said that neither of these two companies had carried out the procedural work necessary ahead of the bid deadline that would have allowed them to make offers. Danaher and Roche did not respond to requests for comment.

Roche, which has its own diagnostics business, made a hostile run at genetic sequencing company Illumina Inc last year but walked away from the $6.8 billion offer, refusing demands to raise the bid.

Life Tech is itself the product of the combination of two companies -- Invitrogen, a maker of cultures used in the manufacture of biotech medicines, and Applied Biosystems, a genetic testing company.

If Thermo Fisher wins the auction, it would also boost its presence in scientific research, genetic analysis and applied sciences, creating a healthcare technology giant with annual revenues of over $16 billion and some 50,000 employees.

At a range of $65 to $70 per share for Life Tech, Thermo Fisher believes the deal would add to its earnings, people familiar with the matter have previously told Reuters.

(Additional reporting by Bill Berkrot in New York; Editing by Edwina Gibbs)

Cruz is the newest Hispanic addition to popular children series' cast, playing Armando, or "Mando."

"'Sesame Street' is a magical place. It doesn't matter if you are working there or just visiting, or if you're watching on TV, that magic is always there," Cruz, 26, told The Associated Press. "I grew up watching the show, and for me it was a place that really existed and to which as a child I aspired to go, a place so diverse that I could see myself in the faces of the people that were there. Being on the set now is that, but with cameras."

Cruz's character is a Hispanic writer from Brooklyn who writes everything from short stories to essays and movie scripts. He also loves technology and social media.

The addition expands a cast of Hispanic characters that includes Maria (Sonia Manzano) and Luis (Emilio Delgado), who debuted on "Sesame Street" in 1971 as human characters, as well as Rosita, the charming turquoise monster who joined in 1993 with Mexican puppeteer Carmen Osbahr, who also voices Ovejita.

The show wants to reflect the population changes in the U.S., where Hispanics are the fastest growing minority. It also features African-American, Asian and American Indian characters.

"It's a show that's always cutting edge, that is always aware of what's going on with the population, so by including a character that is young, with new perspectives, Latino, and that bring that new generation, it is carrying on with that message," Cruz said.

Cruz grew up poor in Aguas Buenas, Puerto Rico, and his mother tuned in to "Sesame Street" so his son would learn English. Cruz studied music and dreamed of being an actor, eventually attending New York University's Tisch School of the Arts. Before "Sesame Street," he appeared on "The Good Wife" and in films "In The Blood," ''White Alligator" and "Chaser."

The casting call for a new Hispanic character on "Sesame Street" attracted hundreds of bilingual actors last August.

"I hadn't seen it, (but) many people who knew me and read the description of what they were looking for sent me messages through Facebook, email and phone telling me, 'You have to do this audition, this is perfect for you.' And that's how I began this process," he said.

"Mando" will make his debut on the 44th season of "Sesame Street," which starts airing on September 16. Carol-Lynn Parente, executive producer of "Sesame Street," said she and her team knew immediately that Ismael was the perfect addition.

"He has a passion for creative expression and a warmth that comes right through the camera," Parente said in a statement.

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Online:

www.sesamestreet.org

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Follow Claudia Torrens on Twitter at //www.twitter.com/ClaudiaTorrens

Backed by solo home runs from Pablo Sandoval, Brandon Belt and Marco Scutaro, Lincecum looked in his best form so far in 2013 as the San Francisco Giants beat the Atlanta Braves 5-1 on Sunday to wrap up an impressive homestand.

Lincecum (3-2) struck out seven in seven scoreless innings to end a three-start winless stretch in which he went 0-2. The two-time NL Cy Young Award winner also stopped a four-start skid against Atlanta, beating the Braves for the first time since April 11, 2010.

"I'll take it," Lincecum said. "But I'm not jumping up in the air right now. ... I'm happy about it, but it's still a work in progress. I'm still working to get better."

Belt hit a solo homer in the second, Sandoval connected in the third and Scutaro went deep leading off the fifth. Gregor Blanco had an RBI double.

Brandon Crawford added an RBI single in the fourth for the Giants, who concluded a 7-3 homestand. San Francisco won a home series against the NL East for the first time since April last year.

Sandoval's two-out drive in the third cleared the elevated right-field arcade and found the water in McCovey Cove, setting off a kayaking commotion in a frenzy to retrieve the souvenir ball.

"Any time Pablo's got a smile on his face it's hard for the whole team not to jump on that energy and feed off it," Lincecum said.

It was the 63rd splash homer by the Giants home run king Barry Bonds has 35 seventh by Kung Fu Panda and second for San Francisco this year. There have been 89 in the 14-season history of AT&T Park, including one by the Braves' Brian McCann on Friday night.

"My wife asked me to hit a home run into the water for her for Mother's Day," Braves starter Kris Medlen joked. "I must have misunderstood her, and gave up a home run that went into the water."

In just his third quality start in eight outings, Lincecum allowed a season-low two hits after being tagged for 19 over his previous two appearances. Giants closer Sergio Romo, San Francisco's fourth reliever, allowed an RBI double to pinch-hitter Evan Gattis for Atlanta's lone run.

Lincecum said he chatted with the other starters after his last outing about getting back on track collectively as a rotation.

"It's just kind of one of those things, we kick each other in the (rear end),'" he said after a 111-pitch performance. "It's just, here we go, this is the start of something hopefully good."

The NL West-leading Giants make a quick, two-game stop starting Tuesday in Toronto, where former San Francisco outfielder Melky Cabrera will receive his World Series ring for contributions last season before his 50-game suspension for a positive testosterone test.

San Francisco then heads to Coors Field in Denver for four games against the Rockies.

"It's not going to be easy travel for these guys," manager Bruce Bochy said. "We get into Colorado late, but that's part of the schedule."

Braves manager Fredi Gonzalez rejoined his team after two days away to attend his daughter Gigi's college graduation in Georgia. But Atlanta lost its third straight since taking the opener Thursday night outscored 23-4 over the final three games.

"We haven't been real fun to watch right now," Gonzalez said. "What did we score, four runs the past couple games? They have a good club and any time we made a mistake they took advantage. We didn't get much of anything going until the end when we scored a run."

The Braves continue their 10-game trip at Arizona, where left fielder Justin Upton will face his former Diamondbacks teammates.

Medlen (1-5) lost his fourth straight decision and saw his winless stretch reach six outings since his lone victory his first time out this year, April 4 against the Phillies.

The right-hander allowed five runs, three earned, walked a season-high five and struck out one in 5 1-3 innings.

Umpires went to a replay review after Scutaro's fly ball in the sixth was interfered with by a fan, preventing a possible catch by Upton. It was ruled a double, giving Scutaro six straight multihit games during his 12-game hitting streak.

NOTES: Lincecum went seven or more innings allowing two or fewer hits for the first time since Aug. 13, 2011, at the Marlins. "It looked nasty from my perspective," Belt said. ... Bochy on all the pink bats, sleeves, cleats and wristbands for breast cancer awareness on Mother's Day: "It's a great day for all of us to have a chance to honor our mothers, and really for me to reflect back and realize how blessed I was to have such a great mother, not just in raising me but she was a big part of my baseball life, with my father being in the service," he said. His mother, Melrose, died in March 2007. ... Bochy hadn't decided on his designated hitter for the two games against the Blue Jays.

Coach Rick Pitino added this title to the one he won at Kentucky in 1996 and is the first coach to win a championship at two schools. Earlier in the day, Pitino was elected to the Naismith Memorial Hall of Fame.

Hancock scored 22 points and Peyton Siva had 18 for the Cardinals (35-5), who trailed by 12 late in the first half before rallying for the school's third national title.

Trey Burke had 24 points for Michigan (31-8), which was in the final for the first time since the Fab Five led the Wolverines there in 1993. Little-used freshman Spike Albrecht added 17 points.

But the celebration belonged to the Cardinals, who added this to a Sugar Bowl victory this year and also have their women's team in Tuesday's national final against Connecticut.

Chane Behanan scored nine quick points early in the second half to help Louisville take the lead after trailing by double digits.

Behanan finished with 15 points and 13 rebounds, including eight on the offensive glass.

Albrecht came in for Burke and made his first four 3-point attempts, scoring all his points in the opening half. Albrecht finally missed with a little more than 11 minutes left; he was still 9 for 10 from long range for the tournament.

Hancock made all four of his 3-pointers to start a 14-1 run for Louisville that briefly gave the Cardinals a one-point lead late in the first half after they trailed by 12. Michigan's Glenn Robinson III made two free throws with 2 seconds left to give the Wolverines the lead at the half but Louisville led by as many as five early in the second.

The Cardinals came in having won six games this season after trailing by 10 or more, including Saturday night's semifinals, when they beat Wichita State 72-68 after also falling behind by 12.

It was a scintillating final act of a season that has been more of a grind, with scoring at its lowest (67.49 points per team) since 1951-52 and shooting at its worst (43.3 percent) since 1964-65.

The 131.2-points-per-game average during March Madness is the lowest since the 3-point line was brought to the game in 1987, though the teams had surpassed that with 5:30 left.

Sitting on the bench with the Cardinals was sophomore guard Kevin Ware, the team's inspiration since snapping his tibia in the regional final last weekend.

Needing a pickup without Ware, Hancock led the scoring against Wichita State. And rarely used walk-on Tim Henderson made two key 3-pointers during the comeback.

Pitino, meanwhile, was working the sideline hours after being chosen for the Naismith Memorial Hall of Fame.

Russ Smith, the Louisville team leader who Pitino has nicknamed "Russdiculous" for some of his wild and wildly effective antics on the court, finished with nine points on 3-of-16 shooting.

Michigan topped Syracuse 61-56 on Saturday despite an off night from Burke, who finished with only seven points on 1-for-8 shooting.

Burke, a sophomore, seriously considered leaving for the NBA after last season but decided he had unfinished business left in Ann Arbor. He picked up the AP Player of the Year award, among others, and is now one victory away from the ultimate prize in college hoops.

The online game maker's stock fell more than 10 percent in extended trading Wednesday after the first-quarter results came out.

Zynga, which makes "FarmVille" and other games, said Wednesday that it earned $4.1 million, which was breakeven per share. A year earlier, it lost $85.4 million, or 12 cents per share. Adjusted earnings were 1 cent per share in the latest quarter, compared with expectations for a loss of 3 cents.

Revenue fell 18 percent to $263.6 million, from $321 million.

Analysts, on average, had expected revenue of $264.5 million, according to FactSet.

As demand for its Facebook games fades, Zynga has cut jobs, closed game studios and shut down games to reduce expenses and focus only on popular titles. The quarter's expenses fell 34 percent to $268.5 million, from $406.6 million.

The number of people who play Zynga games at least once a month fell 13 percent to 253 million, from 292 million a year earlier. The number of daily players dropped 21 percent to 52 million, from 65 million.

CEO Mark Pincus said in a statement that 2013 will "continue to be a transition year." Zynga, whose games are played mainly on Facebook's website, is working on shifting to mobile games and to its own site off of Facebook.

For the current quarter, Zynga is forecasting an adjusted loss of 3 cents to 4 cents per share on revenue of $225 million to $235 million. Analysts were expecting a loss of 1 cent per share on revenue of $258.1 million.

Shares of San Francisco-based Zynga fell 34 cents, or 10.1 percent, to $3.01 in after-hours trading. The stock had closed up 17 cents, or 5.3 percent, at $3.35 before the results came out.

LONDON (Reuters) - Some of the world's most powerful finance chiefs will meet in an English stately home on Friday and Saturday to try to speed up banking and finance reforms, with Cyprus' near meltdown fresh in their minds.

Finance ministers and central bank governors from the Group of Seven industrialized economies probably will not break new ground on how to fix the weak world economy as discussions at the International Monetary Fund took place just three weeks ago.

Officials from two of the G7 economies said the talks - on Friday and Saturday at a 17th-century country house 40 miles northwest of London - were likely to focus more on the slow progress of reforms to banking and finance around the world.

"It's very rare for a G7 to focus on financial regulation," one of the officials said, speaking on condition of anonymity.

The emergency rescue of Cyprus in March acted as a reminder of the need to finish an overhaul of the banking sector, five years after the financial crisis began.

"It makes sense for the G7 financial leaders to send out a message, from high up, that global efforts to ensure financial stability via appropriate regulation must continue," the official said.

Germany may come under renewed pressure to give more support to a banking union in the euro zone as it did at the recent IMF/G20 meeting in Washington. The idea was proposed last year to help strengthen the single currency area but Berlin worries it may foot the bill for future bank bailouts.

While the first step - to create a single bank supervisor under the European Central Bank - looks set to be in place by mid-2014, a second pillar, a 'resolution' agency and fund to close failed banks, is in doubt. And there is little prospect that a third leg, a single deposit guarantee scheme, will ever see the light of day.

"We welcome those discussions," a senior U.S. Treasury official told reporters in Washington. "I think Cyprus just further highlighted the importance of moving to break that feedback loop between sovereigns and bank balance sheets."

Another G7 official said new rules for derivatives trading and the Basel III plan for minimum bank capital levels were running behind schedule and would be among the issues the G7 would discuss, as well as the risk of a reversal in soaring share prices in some countries which contrasts with weak growth.

But some of the officials said they said they did not know why Britain, which is chairing the G7, had called the meeting.

"I am really annoyed that I've got to give up my weekend for this," one complained, adding the talks could have taken place on the sidelines of IMF's meetings in Washington in mid-April.

A British finance ministry official said there was value in informal talks among the world's biggest industrialized economies but declined to comment on the agenda.

CHANGED ROLE FOR GROUP OF SEVEN

G7 finance ministers and central bank governors used to hold global markets in their thrall when they met, given the combined financial firepower of the group's members - the United States, Germany, Japan, Britain, Italy, France and Canada.

But it lost its mantle as the main forum for thrashing out differences over the global economy in 2009 when responsibility was passed to the wider Group of 20 which includes emerging heavyweights such as China, Brazil and India.

Since then, the G7 has met on the sidelines of G20 and IMF meetings but has held few standalone meetings although officials say the smaller grouping makes for more open discussion.

"As often is the case, the G7 is a photo opportunity. But it's important that it stays together as a forum to address the issues," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.

The U.S. official said Washington would keep up its calls on Europe to boost demand and maintain its focus on Japan's aggressive monetary policy which has raised U.S. concerns about a weakening of the yen.

A Canadian official said discussions would again focus on the right degree of belt-tightening for debt-laden countries which are struggling to get their moribund economies growing and have relied heavily on massive central bank stimulus.

No communiqu and no formal decisions are expected at the meeting which would instead help prepare the way for a G20 leaders' summit in Russia in September.

It comes at a relatively good time for its host, UK finance minister George Osborne. He will be able to point to a few signs of life in Britain's stagnant economy that have taken some of the heat out of criticism of his austerity policies.

The meeting will also be a chance for the G7 to get to know new members of the group - such as the finance ministers of the United States and Italy - and to bid farewell to Mervyn King, who retires from the Bank of England in June.

(Reporting by members of the Reuters G7 team, editing by Mike Peacock)

WASHINGTON (Reuters) - China is using espionage to acquire technologies to fuel its fast-paced military modernization program, the Pentagon said on Monday in an annual report that for the first time accused Beijing of trying to break into U.S. defense computer networks.

In its 83-page annual report to Congress on Chinese military developments, the Pentagon also cited progress in Beijing's effort to develop advanced-technology stealth aircraft and build an aircraft carrier fleet to project power further offshore.

The report said China's cyber snooping was a "serious concern" that pointed to an even greater threat because the "skills required for these intrusions are similar to those necessary to conduct computer network attacks."

"The U.S. government continued to be targeted for (cyber) intrusions, some of which appear to be attributable directly to the Chinese government and military," it said, adding the main purpose of the hacking was to gain information to benefit defense industries, military planners and government leaders.

A spokeswoman said it was the first time the annual Pentagon report had cited Beijing for targeting U.S. defense networks. Despite concerns over the intrusions, a senior U.S. defense official said his main worry was China's over lack of transparency about its military intentions.

"What concerns me is the extent to which China's military modernization occurs in the absence of the type of openness and transparency that others are certainly asking of China," David Helvey, deputy assistant secretary of defense for East Asia, told a Pentagon briefing on the report.

Helvey welcomed Chinese moves toward greater openness but said there were still many unanswered questions and warned of the "potential implications and consequences of that lack of transparency on the security calculations of others in the region."

The annual China report, which Congress began requesting in 2000, comes amid ongoing tensions in the region due to China's military assertiveness and expansive claims of sovereignty over disputed islands and shoals. Beijing has ongoing territorial disputes with the Philippines, Japan and other neighbors.

Beijing's publicly announced defense spending has grown at an inflation-adjusted pace of nearly 10 percent annually over the past decade, but Helvey said China's actual outlays were thought to be higher.

China announced a 10.7 percent increase in military spending to $114 billion in March, the Pentagon report said. Publicly announced defense spending for 2012 was $106 billion, but actual pending for 2012 could range between $135 billion and $215 billion, it said. U.S. defense spending is more than double that, at more than $500 billion.

The report highlighted China's continuing efforts to gain access to sophisticated military technology to fuel its modernization program. It cited a laundry list of methods, including "state-sponsored industrial and technical espionage to increase the level of technologies and expertise available to support military research, development and acquisition."

"China continues to engage in activities designed to support military procurement and modernization," the report said. "These include economic espionage, theft of trade secrets, export control violations, and technology transfer."

Dean Cheng, an analyst at the conservative Heritage Foundation think tank, said he was surprised by the number of cases of human espionage - as opposed to just cyber prying - cited in the report.

"This is a PLA that is extensively, comprehensively modernizing ... they're pushing across the board," Cheng said. "China is also comprehensively engaging in espionage."

China tested its second advanced stealth fighter in as many years in October 2012, highlighting its "continued ambition to produce advanced fifth-generation fighter aircraft," the report said. Neither aircraft of its stealth aircraft is expected to achieve effective operational capability before 2018, it said.

Last year also saw China commission its first domestically produced aircraft carrier, the report said. China currently has one aircraft carrier purchased abroad and conducted its first takeoff and landing from the ship in November, the report said.

It predicted China would spend three to four years training and integrating the ship into its fleet before having a fully operational aircraft carrier capability.

(Reporting By David Alexander and Phil Stewart; Editing by Cynthia Osterman and David Brunnstrom)

Michigan Gov. Rick Snyder was in attendance on Monday as the Detroit Public Schools (DPS) announced that three of its schools will be the beneficiaries of a $1.5 million grant by JPMorgan Chase. The grant will be given specifically to the nonprofit organization Southwest Solutions, to be used for different projects aimed at jump-starting the "community hubs" initiative that the DPS launched earlier this month,

The initiative looks to use existing Detroit public schools as the foundation to rebuild the city as a set of communities. As such, the new grants will be used in conjunction with the state Department of Human Services' Pathways to Potential programs to provide "success coaches" in the three schools, so as to give families better access to both state and federal resources.

Here is some of the key information that emerged from the grant announcement by DPS on Monday.

* The three schools that have been chosen to benefit from the grant money are: Western International High School, Harms Elementary, and Maybury Elementary.

* Under the DPS' five-year plan, schools will offer in-house social services. Some eventually will do so for as many as 12 hours a day.

* John Van Camp, who is the president of Southwest Solutions, spoke of his organization's enthusiasm for the community hub projects, telling the Detroit Free Press that the agency is "so pleased to be a part of that movement."

* According to athe grant money is slated for use in providing foreclosure protection, job training programs, and financial literacy programs, among other services.

* The DPS' five-year plan is expected to be funded largely through partnerships with community groups and private interests such as Southwest Solutions, rather than through the school district itself.

* The emergency financial manager in charge of the Detroit Public Schools, Roy Roberts, told MLive on Monday that he and other officials have identified up to 30 additional schools that could function as community hubs, providing educational opportunities for Detroit children as well as social services for their families.

* For his part, Snyder expressed his enthusiasm for the project as well, telling MLive that he was "excited to see the private sector diving into projects like this."

* State Department of Human Services Director Maura Corrigan was also on hand for Monday's announcement. During her remarks she referred to the community hub program as"the model we need to reinvent Michigan,"

Haye, who lost his WBA belt in July 2011 to Ukrainian Vladimir Klitschko before beating Dereck Chisora 12 months later, faces Charr who has won all but one of his 24 professional bouts.

His only defeat came against Klitschko's older brother Vitaly last September when the Ukrainian retained his WBC title when the referee stopped the contest in the fourth round after Charr sustained a deep cut above his right eye.

Haye, who wants one of the Klitschko brothers to give him a world title shot, has a professional record of 26 wins and two defeats.

"(Haye) is determined to add another world title to his collection and sees his June 29 opponent as the next step towards doing just that," Haye's promoters said in a statement.

(Reporting by Sonia Oxley; Editing by Mark Meadows)

The remarks signaled trouble for U.S. Secretary of State John Kerry's new push for Mideast peace and risked reinforcing Benjamin Netanyahu's image as a hard-liner unwilling to make the tough concessions required for peace.

Netanyahu has not commented directly on the Arab League's latest initiative, but his words questioned its central tenet the exchange of captured land for peace and appeared to counter a modified peace proposal from the Arab world that Washington and Netanyahu's own chief negotiator have welcomed.

The original 2002 Arab initiative offered a comprehensive peace between Israel and the Muslim world in exchange for a withdrawal from all territories Israel captured in the 1967 Mideast war. Sweetening the offer this week, the Arab sponsor said final borders could be drawn through mutually agreed land swaps.

Netanyahu questioned the premise that borders are the key.

"The root of the conflict isn't territorial. It began way before 1967," he told Israeli diplomats. "The Palestinians' failure to accept the state of Israel as the nation-state of the Jewish people is the root of the conflict. If we reach a peace agreement, I want to know that the conflict won't continue that the Palestinians won't come later with more demands."

The Palestinians have rejected Netanyahu's demand to recognize Israel as a Jewish state, saying that would undermine the rights of Israel's Arab minority as well as millions of refugees whose families lost properties during the war surrounding Israel's establishment in 1948. The fate of the refugees is a core issue that would need to be resolved in a final peace deal.

After meeting U.S. congressmen Wednesday, Netanyahu said he appreciated the efforts of President Barack Obama and Kerry to restart negotiations but said that for talks to succeed, the Palestinians must also guarantee solid security arrangements. "We're prepared to discuss many things, but I will never compromise on Israel's security," he said.

Qatari Prime Minister Sheik Hamad Bin Jassem Al Thani tried to allay some of the Israeli concerns as he presented the offer on Monday.

Speaking on behalf of an Arab League delegation, he reiterated the need to base an agreement between Israel and a future Palestine on the 1967 lines, but for the first time, he cited the possibility of "comparable," mutually agreed and "minor" land swaps between the Israelis and the Palestinians.

The sides were reportedly close to an agreement based on these guidelines during the last serious round of talks in 2008 but the talks failed. Swaps of territory were also a basis for a failed summit in the U.S. in 2000.

Negotiations have largely been frozen since 2008, and the new U.S. administration has been trying to get the peace talks back on track.

As part of his effort, Kerry has been pushing Arab leaders to embrace a modified version of the Arab peace plan. The changes are meant to win Israeli support by allowing it to keep parts of the West Bank and east Jerusalem as part of an agreement.

Though Netanyahu's office has remained silent on the modified Arab proposal, his chief peace negotiator, Justice Minister Tzipi Livni, has welcomed it, as have Israel's president and the main opposition parties. However, Netanyahu's own political base and one of his main government coalition partners are either opposed to giving up land or suspicious of the Arabs' motivations.

Former Prime Minister Ehud Olmert, a rival of Netanyahu, said the initiative disproves the belief held by many in Israel that "there is no one to speak to."

"We cannot, under any circumstances, again be the ones that express doubts about a process that can lead to negotiations," Olmert told Israel's Channel 10 TV, urging Netanyahu to capitalize on "a historic opportunity."

Opposition Israeli lawmakers also urged Netanyahu to embrace the new Arab outreach.

"It was bad enough that we ignored it once. Ignoring it now ... after everything that is happening in the Arab world, I think it would be a very, very big mistake," said Merav Michaeli, a lawmaker from the centrist Labor Party. She said if Netanyahu does not respond, it would show that he does not want a peace accord.

Kerry called the new peace plan a "very big step forward," though Palestinian officials have been cool to the concept, insisting that negotiations still need start with the 1967 lines.

The original 2002 Arab peace initiative offered Israel peace with the entire Muslim world in exchange for a "complete withdrawal" from territories captured in the 1967 Mideast war. The Palestinians claim the West Bank, east Jerusalem and the Gaza Strip, all seized by Israel in 1967, for their future state. Israel withdrew from Gaza in 2005.

Though the latest proposal appears aimed at the Palestinians, the original formula refers to other territories as well. Israel also captured the Sinai from Egypt and Golan Heights from Syria in the 1967 war, withdrawing from Sinai in 1982. Peace talks between Israel and Syria over the fate of the Golan failed more than a decade ago.

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Associated Press writer Daniel Estrin contributed.