Death of hostage jolts peace process: In a bitter irony, the Nobel prize goes to Palestinian and Israeli leaders on a day of death and tragic miscalculation

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THE DEATH of the kidnapped Corporal, Nachson Waxman, in a failed rescue attempt by Israeli soldiers, could deliver a serious jolt to the Middle East peace process - on the day the Nobel prize was awarded to former Israeli and Palestinian enemies.

President Clinton last night urged Israelis and Arabs to maintain the peace process. 'I know that it is hard to go forward, but we owe it to all those who have paid such a heavy price to persist and finally prevail in our pursuit of peace,' the US President said.

An aide to the PLO leader, Yasser Arafat, said the Israeli Prime Minister, Yitzhak Rabin called Mr Arafat and they exchanged ideas about resuming negotiations and the future of the peace process.

'We will find what we have to do to make it possible to continue the peace process, bearing in mind that the Gaza Strip is the cradle of Hamas terror activities,' Mr Rabin said last night.

The raid came despite the decision by Hamas, the Israeli soldier's radical Islamic captors, to extend by 24 hours the deadline for his execution. Hamas was demanding that Israel release two militant clerics and almost 200 other Muslim activists.

One of the clerics, the Hamas spiritual guide Sheikh Ahmed Yassin, spoke from his Israeli jail cell to the captors, enjoining them to treat the soldier well, in accordance with Islamic precepts, and to restore him to his family.

Israel's cabinet refused to negotiate. 'Whoever gives in to extortion and terror makes himself a permanent target,' said the Police Minister, Moshe Shahal.

The kidnappers seemed set on carrying out their threat despite pleas for clemency from Muslims and Jews alike, and an appeal to respect Islamic principles of mercy from some of the very prisoners they were seeking to free. Egyptian diplomats were also trying to persuade Hamas to spare the captive.

Mr Rabin earlier suspended peace negotiations with the PLO, saying he held Mr Arafat responsible for the soldier's safe return.

The PLO sent hundreds of police and plainclothes men to search refugee camps and tenements in Gaza. They rounded up almost 300 fundamentalist sympathisers but did not find the hostage. Israeli ministers acknowledged that the PLO was making efforts to free Corporal Waxman.

The kidnapping and subsequent bloody shoot-out may not only stall the peace process, it could shatter the fragile facade of Palestinian unity and precipitate armed conflict in the self-ruled Palestinian areas.

Hamas opposes the peace settlement with Israel and seeks to establish an Islamic state in all the historic territory of Mandate Palestine between the River Jordan and the Mediterranean.

It was a sign of dramatically changed times that Corporal Waxman's plight brought an outpouring of sympathy from both sides of the Israeli-Palestinian dispute. Palestinians drawn from many factions held in Israel's Beersheba jail sent a public letter to Hamas calling on the group not to harm him.

(Photograph omitted)