An elderly Israeli Arab in his home in the village of Ghajar on the border with Lebanon, 03 May 2009Israel's new right-wing government is considering a territorial concession to Lebanon.

Prime Minister Benjamin Netanyahu supports pulling out of a disputed Arab village on Israel's northern border and handing it over to Lebanon.  Israeli officials say Mr. Netanyahu might offer the concession when he meets U.S. President Barack Obama at the White House later this month.

Israel captured the village of Ghajar from Syria during the Six Day War in 1967 and annexed it along with the Golan Heights in 1981.  Today, Israel claims half of Ghajar; Lebanon claims all of it.

The Israeli newspaper Ha'aretz writes that the United States contends an Israeli withdrawal from Ghajar would strengthen moderates in Lebanon ahead of upcoming elections.  The western-backed Lebanese government is facing a major challenge from the Islamic militant group Hezbollah in a vote scheduled for June 7.

But when news of a possible Israeli pullout reached Ghajar, residents were angry.

Rajib Khattib, a spokesman for Ghajar, said Mr. Netanyahu is going to the United States to "sell the village."

He told Israel Television that the village was a part of Syria and the Golan Heights, and that it has nothing to do with Lebanon.

But it could be a win-win situation for Mr. Netanyahu, who opposes the U.S. push for a Palestinian state.  By endorsing a Ghajar pullout, analysts say the prime minister can show President Obama that he is flexible; while at the same time relieving Israel of a largely Arab village that is often cited as a focal point for espionage and drug smuggling.