Peace process 'under threat'

Palestinian leaders yesterday warned President George Bush that he will destroy the peace process if he releases loan guarantees for Israel without assurances of a total settlement freeze from the Prime Minister, Yitzhak Rabin.

In what was a generally sceptical reaction to Mr Rabin's inaugural speech on Monday and his offer of a partial freeze on settlements, the Palestinians did not, however, rule out a positive response to the new leader's invitation to informal talks in Jerusalem. Faisal al-Husseini, the non- elected Palestinian leader in the occupied territories, said he would await a direct invitation.

The warning on settlements was clearly aimed at pre-empting any early rapprochement between Israel and the United States.

The Palestinian leadership appeared anxious to separate the new Prime Minister's rhetoric from the substance of what he was offering to concede. There appears to be concern that the US, pleased as it clearly is with Mr Rabin's significant shift in tone on the peace talks, may try to steamroller the Palestinians into accepting terms which fall well short of their often repeated demands.

While accepting that there were positive elements in Mr Rabin's speech - and declaring themselves ready to meet Mr Rabin's deadline of six to nine months for self-rule 'with Israeli goodwill' - the leaders also emphasised the 'discouraging' aspects of the speech. In particular, Mr Rabin's refusal to offer a total settlement freeze and end land expropriation was 'not encouraging'.

In a clear plea to the US not to shift its backing for a total settlement freeze, Haider Abdelshafi, head of the Palestinian negotiating delegation, said the freeze on loan guarantees had been intended to convey the message that continued building of settlement is 'incompatible with the prospects for peace'. He added: 'If the US is going to go back on that it will now convey the opposite message. It will legitimise the settlement process. This is going to destroy the peace process.'

The Palestinian leaders also reacted angrily to Mr Rabin's total refusal to discuss the status of Jerusalem within the context of the peace negotiations. The limits placed by Mr Rabin on the scope of the new round of talks 'does not leave much room for negotiation', said Dr Abdelshafi.

DAMASCUS - Syria accused Mr Rabin yesterday of pursuing 'an aggressive and expansionist' policy like his predecessor Yitzhak Shamir but in a different shape. The comment came in the official daily Tishreen, which reflects government thinking, Reuter reports.