He provided no indication of which neighborhoods he was referring to.
In an interview with the Qatar-based Al-Jazeera network, Barak said, however, that the sides could find a formula under which certain heavily-populated Arab neighborhoods including neighboring villages around Jerusalem could become part of the Palestinian capital.
When asked if a deal was still possible in 2008, Barak said he was not sure that the gaps between the sides were close enough.
Reported by Reka Network
Background information about Ehud Barack from Wikipedia
In 2005, Barak announced his return to Israeli politics, and ran for leadership of the Labor Party in November. However, in light of his weak poll showings, Barak dropped out of the race early and declared his support for veteran statesman Shimon Peres.
After Peres lost the race to Amir Peretz and left the Labor party, Barak announced he would stay at the party, despite his shaky relationship with its newly elected leader. He declared, however, that he would not run for a spot on the Labor party's Knesset list for the March 2006 elections.
In January 2007 Barak launched a bid to recapture the leadership of the Labor party in a letter acknowledging "mistakes" and "inexperience" during his tenure as Prime Minister. In early March of 2007, a poll of Labor Party primary voters put Barak ahead of all other opponents, including current leader Amir Peretz. In the first round of voting, on 28 May 2007, he gained 39% of the votes, more than his two closest rivals, but not enough to win the election.
As a result, Barak faced a runoff against the second-place finisher, Ami Ayalon, on June 12 2007, which he won by a narrow margin.
The issue of Jerusalem had been one of the main problems in the Israeli Palestinian peace process. Now Ehud Barack indicating he is willing to cede some parts of East Jerusalem, populated mainly with Palestinians, is a major breakthrough and could show the light at the end of the tunnel leading to an Israeli Palestinian peace.