Arafat to demand Palestine's gold

YASSER ARAFAT, the chairman of the Palestine Liberation Organisation (PLO), is expected to ask the British government for the return of gold worth pounds 1bn believed to have been held in Palestine.

Mr Arafat, who arrives in London tomorrow for two days of talks, always carries a Palestinian pound note dating back to the days of the British mandate. 'Where is the gold to cover this pound?' he asked this week.

While Mr Arafat was still a guerrilla leader the gold had little political value; but the pound note, issued by the Palestine Currency Board - which was backed by gilt-edged stock issued by the Bank of England - was more 'historic evidence' that a Palestinian political entity issuing currency existed before the birth of Israel in 1948.

The gold reserves, sought by Mr Arafat as the recognised head of a new Palestinian entity, have apparently disappeared. Some former civil servants in the Palestine administration say the gold was divided between Israel and Jordan, which annexed the West Bank until it was lost to Israel in the Six-Day War. British officials have said that all Palestinian claims were honoured by 1986.

The issue has given the Arab nationalist press a golden opportunity to hurl abuse at 'John Bull' for 'robbing the gold' - in addition to the old accusation of 'giving Arab Palestine to the Zionists'.