Israeli siege of Arafat 'is killing peace hope'

The Israeli army's siege of Yasser Arafat amid the ruins of his bulldozed presidential compound could mean "the death" of hopes for a Palestinian state and a peace agreement, the United Nations' most senior envoy to the Middle East said yesterday.

"The deterioration is leading towards a situation where we could be seeing the beginning of the death of the two-state solution," Terje Roed Larsen, one of the architects of the 1993 Oslo peace accords, said.

President George Bush has said he wants a "two-state solution", where a Palestinian state is recognised alongside Israel, as part of a final peace agreement. But, in remarks that were scathingly critical of Ariel Sharon's government yesterday, Mr Larsen said the siege had eroded the Palestinian Authority so much that "we're moving in the direction of state destruction and not state-building".

Mr Arafat has been under siege for a week now, after the Israeli army bulldozed most of his compound to rubble around him. Despite criticism from the White House – thought to be worried that the siege could damage efforts to get Arab backing for attacking Iraq – the Israeli government is refusing to lift it.

"The international community is now facing a major challenge," Mr Larsen said in an interview with the Reuters news agency yesterday. "It cannot allow this gap to widen. The credibility of key international players is at stake. Words have to be paired with deeds."

With Palestinian cities in the West Bank reoccupied by the Israeli army and under near constant curfew, the ruins of Mr Arafat's presidential compound are almost the last vestige of Palestinian self-rule in the West Bank. "If the siege is prolonged, it could undermine the reform efforts," Mr Larsen said.