Israel and the Palestine Liberation Organisation failed to agree yesterday on an accord to extend Palestinian self-rule to more of the West Bank, despite all-night talks between the Israeli Foreign Minister, Shimon Peres, and the PLO chairman, Yasser Arafat. However, the two leaders issued a statement saying Israel and the PLO will sign an accord on 25 July.
Prime areas of disagreement remain the control of the roads between the Palestinian cities from which Israel has agreed to withdraw its troops, and the right of its soldiers to return.
"We've agreed on major Arab cities and most of the Arab villages," Mr Peres said after eight hours of talks. "There won't be Israeli installations there, neither police nor military. The roads which are jointly used [by Israelis and Palestinians] will have special arrangements." But "the night was not long enough", said Mr Peres, who added later that Israel would make no concessions on issues relating to security.
A United States official was quoted as saying that the American administration wanted the final stages of the Israeli-Palestinian negotiations to take place in Washington over the next two weeks, with a signing ceremony on 17 July.
Israel has agreed to withdraw from the centres of four Palestinian cities - Nablus, Jenin, Qalqilya and Tulkarm - but the timing of the pullout is uncertain. This is to be followed by further redeployment from the towns of Ramallah and Bethlehem to the north and south of Jerusalem.
A critical issue for the Palestinians is Israeli control of communications around the West Bank cities. They are worried that cities like Jenin and Nablus would find themselves cut off from their surrounding villages by Israeli roadblocks, crippling local commerce and bringing about a fall in the local standard of living.
"Israel insists on the right to return after redeployment," said a senior PLO official, Feisal Husseini. "Palestinians reject that and say they can return only in hot pursuit of terrorists."
Mr Peres said that Mr Arafat had asked for another meeting in 24 hours. Earlier another negotiator, the Environment Minister, Yossi Sarid, said the main disagreement was over security of roads after the Israeli troop redeployment.
Palestinian leaders believe that once the partial troop withdrawal has taken place, it will be very difficult for any future Likud government to reverse the process.
At the same time the 120-page draft agreement establishes conflicting jurisdictions on the West Bank and leaves for later negotiations the future of the 140,000 Israeli settlers on the West Bank. Other key unresolved issues include the right to water and public land outside the Palestinian cities.
After the weekly cabinet meeting in Jerusalem yesterday Israeli ministers denied that the talks were in crisis. "This isn't a crisis now, but rather the last part of a climb up a mountain," said Mr Sarid. "That part, as you know, is always the steepest."