Gas rig in the Mediterranean
Gas rig in the MediterraneanFlash 90

Lebanon is preparing to offer a compromise to US energy envoy Amos Hochstein to resolve a dispute with Israel over maritime gas resources, three Lebanese officials with knowledge of the negotiations told Reuters on Monday.

Hochstein landed in Beirut on Monday at the invitation of the Lebanese government, which had objected to the arrival of a vessel operated by London-based Energean off the Mediterranean coast on June 5 to develop a gas field known as Karish.

Israel has said Karish is part of its exclusive economic zone, but Lebanon argues the field is in contested waters and should not be developed until the two countries conclude their indirect talks to delineate their maritime borders.

Last week, Hezbollah leader Hassan Nasrallah threatened Israel over the presence of Karish, saying that "sending the Karish rig for gas drilling in the area of ​​the border is aggression against Lebanon."

In 2021, official discussions commenced between representatives of Israel and Lebanon, with the aim of reaching an agreement on their maritime border.

There have been major natural gas discoveries off the coasts of both countries during the last decade, and the border dispute has halted gas exploration in an area that has attracted the interest of US energy companies.

The talks were initiated after Lebanon signed its first contract to drill for oil and gas off its coast with a consortium comprising energy giants Total, ENI and Novatek, including in a block disputed by Israel.

Israel says one of two blocks in the eastern Mediterranean where Lebanon wants to drill for oil belongs to it, and had denounced any exploration by Beirut as "provocative".

The talks fizzled out last year after Lebanon pushed its claim in the disputed zone from a boundary known as "Line 23" further south to "Line 29," adding around 1,400 square km (540 square miles) to its claim, including part of Karish.

To overcome the impasse, Hochstein proposed a field-swap that would create an S-shaped boundary instead of a straight line, but Lebanon did not officially agree to the proposal, official sources told Reuters on Monday.

Lebanon has insisted on renewing the indirect talks, but has not yet publicly announced whether it would stick to Line 29 as a starting position for those negotiations.

The US considers Line 29 a "non-starter," according to sources.

The sources said President Michel Aoun would meet Hochstein on Tuesday morning and propose "Line 23, plus a little more."

US President Joe Biden tapped the Israeli-born Hochstein to take over as mediator in the US-sponsored talks between Israel and Lebanon.

Nasrallah recently took aim at Hochstein and called him "dishonest and compromised and supportive towards Israel".

The Hezbollah leader touted Lebanon’s natural gas reserves as a potential game changer for Lebanon's economy, while warning that “negotiating with Hochstein would not lead to any good outcome.”

Directly addressing the Lebanese government involved in the maritime border talks, Nasrallah said that "if you want to continue negotiating, go ahead, but not in Naqoura (the UNIFIL site in southern Lebanon hosting the talks), and not with Hochstein, Frankenstein, or any other Stein coming to Lebanon."