British negotiators now proposed a second peace settlement to Congress. The terms presented by the Carlisle Peace Commission included acceptance of the principle of self-government. Parliament would recognize Congress as the governing body, suspend any objectionable legislation, surrender its right to local colonial taxation, and discuss including American representatives in the House of Commons. In return, all property confiscated from Loyalists would be returned, British debts honored, and locally enforced martial law accepted. However, Congress demanded either immediate recognition of independence, or the withdrawal of all British troops; they knew the Commission were not authorized to accept these, bringing negotiations to a rapid end.