I have actually heard about it and hey surprise I also use it , I also check the references that google provides prior to posting them . Some of them hey even wikipedia are biased, I assume that you know that.
The Arab Peace Initiative (Arabic Language: مبادرة السلام العربية) is a comprehensive peace initiative first proposed in 2002 at the Beirut Summit of the Arab League by then-Crown Prince, King Abdullah of Saudi Arabia, and re-endorsed at the Riyadh Summit in 2007.[1] The initiative attempts to end the Arab-Israeli conflict, which means normalizing relations between the entire Arab region and Israel, in exchange for a complete withdrawal from the occupied territories (including East Jerusalem) and a "just settlement" of the Palestinian refugee crisis based on UN Resolution 194 (which calls for a diplomatic resolution to the conflict and resolves that any refugees "wishing to return to their homes and live at peace with their neighbors" should be able to do so or if they otherwise wish to be provided with compensation).[2] The Initiative was initially overshadowed by the Passover Massacre, a major terrorist attack that took place on March 27, 2002 (the day before the Initiative was published) and that had been claimed by the Izz ad-Din al-Qassam Brigades, Hamas' military wing.[3] The Arab League has since readopted the Initiative on several occasions, including during the 2007 summit.
The above has a couple of things the Isrealis will ahve a problem with , Jerusalem is one , and the living in peace and harmony part is another, there are no security guarantees in the document.
Regardless the Isreali govt is still considering it... but don't hold your breath any compromise will ahve to include Jerusalem as the capitol of Isreal and security.