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Barak reported to have accepted Palestine deal

MIGHTY GAPS separate the Israeli and Palestinian leaders, who will together hold talks with Bill Clinton in Oslo today, but they may have reached an outline agreement in one key area as they explore the path to peace.

Analysts from both sides were giving credence to a report published yesterday in Ha'aretz, an influential Israeli newspaper, which stated that Israel's Prime Minister, Ehud Barak, would accept the establishment of a Palestinian state as part of a framework agreement due to be signed with Yasser Arafat in February.

The newspaper said that the condition was worked out during informal contacts between Israel, the United States and the Palestinian Authority before the start of the two-day summit in Norway, which opened yesterday and which will today climax with a three-way meeting between Mr Arafat, Mr Barak and Mr Clinton.

The state, within part of the occupied territories, would not finally come into existence until the eve of the signing of a final agreement. Under the agreed timetable, this is scheduled for next September although, in reality, it is a remote prospect because of the areas of outstanding disagreement. Israel, the report states, would rather do a deal with a recognised state than a temporary entity.

While there may be broad consensus in principle over Palestinian statehood, the same cannot be said of the bulk of Mr Barak's other negotiating positions. So wide is the gap that the Palestinian chief negotiator, Yasser Abbed Rabbo - who is generally disliked by the Israelis - is rumoured to have taken to referring to the Israeli premier as "Barak-yahu", after his intransigent right-wing predecessor, Benjamin Netanyahu.

Mr Barak's so-called "red line" terms include no withdrawal to Israel's 1967 borders; the right of Jewish settlers living in occupied territories to remain under Israeli control; and the denial of any right of return for Palestinian refugees from 1948 driven out with the creation of Israel.

Above all, Israel remains as immovable as ever on an undivided Jerusalem - a burning issue among both the Israeli public and the Palestinians, who also want to establish their own capital in the city, with access to Islamic holy sites.

The difficulty of surmounting these differences was evident yesterday in the guarded remarks of the players as they convened in Oslo, hoping against the odds to reignite some of the optimism on Middle Eastern affairs that the city has yielded before.

Oslo was the scene of the secret talks that led to the 1993 peace accords; a year later, it played host to Mr Arafat, Shimon Peres and Yitzhak Rabin when they received the Nobel peace prize.

In search of new hope, the ghost of Yitzhak Rabin, assassinated four years ago, has been summoned up again in Oslo, with a memorial service today in his name.

Mr Barak suggested that another summit might be held in forthcoming weeks to work out the framework agreement - prompting speculation that the US President may stage a meeting in January akin to the Camp David summit in 1978, which resulted in Israel's first treaty with an Arab state, Egypt.

The American President dismissed the idea as "premature", but did not rule it out.