Israel tries to breathe life into peace talks

Israel is preparing a package of gestures designed to revive the peace negotiations with the Palestinians that have been frozen since work began on a contentious Jewish housing project at Har Homa in Arab East Jerusalem two months ago.

The measures are expected to include firm steps to building homes for Arabs in Israel's disputed capital and the restoration of residence rights in Jerusalem to hundreds of Palestinians who forfeited them by moving out of the city.

The Israelis are also considering a more flexible approach on various unfulfilled commitments made by the previous Labour government under the interim agreement. Among these are Palestinian air and sea ports in the Gaza Strip; a safe-passage road link between Palestinian-controlled areas of the West Bank and Gaza; and access for Palestinian workers to jobs in Israel.

The Palestinians remain sceptical, however, about whether the Prime Minister, Benjamin Netanyahu, can or will deliver. The Bar-On scandal over the dubious appointment of an underqualified lawyer to the post of Attorney-General has left him both weaker and more dependent on hardliners in his right- wing and religious coalition.

The Interior Ministry, a fiefdom of the Sephardi Shas party, is resisting the Prime Minister's attempt to stop it confiscating Jerusalem identity cards from Arabs who have moved either abroad or to the West Bank suburbs. And Mr Netanyahu himself is defying international pressure to stop building 6,500 Jewish homes on Har Homa.

The Palestinian leader, Yasser Arafat, complained yesterday that the Israeli government was not interested in salvaging the peace process. Speaking to reporters on his return from talks in Cairo with President Hosni Mubarak of Egypt, he accused Mr Netanyahu of continuing to violate signed agreements.

Mr Arafat is to meet Israel's figurehead president, Ezer Weizman, on the border between Israel and Gaza this evening, but neither side expects more than a gentle warming of the atmosphere. In a week of quickening diplomatic activity, Mr Netanyahu will also hold talks today with Crown Prince Hassan of Jordan, though again they are likely to have a marginal impact on the Israeli-Palestinian imbroglio.

In the longer term, Israelis and Palestinians reluctantly acknowledge that their best hopes lie with the United States. Dennis Ross, President Bill Clinton's Middle East troubleshooter, returns to the region tomorrow. Under the new Secretary of State, Madeleine Albright, Washington seems to have resigned itself to a more active role.

It has been pressing Mr Netanyahu to come up with confidence-building measures, and US officials are now expected to take part in all negotiating sessions. Previously, the Clinton administration had preferred to let the two sides solve their own problems, reserving its intervention for the final, critical stages.

This is clearly no longer enough. David Afek, the disenchanted head of the Israeli Foreign Ministry research department, went so far last week as to pronounce the peace process dead.

It will take all the skill and leverage the Americans can marshal to resurrect it.

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