In a speech at a police academy in Bogota, Uribe authorised government representatives to travel to an as yet unidentified 150-square kilometre zone.
"This area would include the presence of international observers to define the humanitarian exchange and weapons would not be allowed," Uribe said.
"There must be no military or police posts which need to be moved."
Zone operation
Juan Manuel Santos, the Colombian defence minister said that the zone would only be in operation for one month.
The proposal moves closer to the Farc's long-standing demand for a temporary New York City-sized safe haven in the southern Colombian municipalities of La Florida and Pradera for talks on a prisoner swap.
The move comes after Anncol, a news agency close to Farc, praised moves by Nicolas Sarkozy, the French president, to win the hostages' release.
"The French government's intentions are good, praiseworthy and healthy," the agency said in a statement on Thursday.
Sarkozy had earlier urged Manuel Marulanda, the Farc leader, to release the hostages.
"You can show the world that the Farc understand humanitarian imperatives. You carry a heavy responsibility. I ask you to assume it," he said in a televised message on Thursday.
Hostage video
Betancourt, who was seized when she was running for Colombia's presidency in 2002, was seen for the first time in several years last week, when videos and letters captured from the rebels were released to the press.
The video showed Betancourt looking thin and dispirited.
Farc, the main rebel group in Colombia with some 17,000 members, has demanded the release of about 500 of its members in exchange for freeing the "political" hostages.
Hugo Chavez, the Venezuelan president, had initially mediated in the efforts to achieve a swap.
However, Uribe caused a diplomatic row in November when he halted Chavez's efforts, claiming the leftist leader was biased in favour of the Farc.