Clinton hopes to meet Barak, Arafat, says Ben-Ami

Barak and Arafat are to respond by Wednesday to U.S. proposals for a peace deal, presented Saturday to Israeli and Palestinian officials meeting in Washington. Ben-Ami told Israel Radio he was "encouraged" by the talks in Washington, but Palestinian officials say wide gaps continue to separate the sides.

The Israeli minister did not detail the U.S. proposals, but said that an agreement "is built on a cocktail of things, some of which are more pleasant and some less pleasant, otherwise there would never be an agreement." However, the authoritative Israeli Ha'aretz daily reported Sunday that the U.S. proposals call for Jerusalem to be divided, with Palestinians receiving control over the Arab neighbourhoods in East Jerusalem, the Moslem and Christian Quarters in the Old City, and the Haram al-Sharif/Temple Mount Compound, a site sacred to both Moslems and Jews.

Israel will retain control over the Jewish neighbourhoods of Jerusalem, the Jewish and Armenian Quarters of the Old City, and the Western (or Wailing) Wall, Judaism's holiest site. The proposal also calls for the majority of Palestinian refugees to be settled in countries where they now reside, with some absorbed in the Palestinian areas and only a small number allowed to return to their homes in Israeli territory.

It proposed that a Palestinian state be established on 95 per cent of the West Bank, and 100 per cent of the Gaza Strip. The remaining five per cent of the West Bank will come under Israeli sovereignty and will house Israeli settlement blocks.

(klei/dpa)