Israel and PLO on Homestretch For Palestinian Autonomy Deal

ISRAELI and Palestinian officials entered the final stretch of their autonomy negotiations yesterday, sitting down for last-minute talks in Cairo before their agreement is due to be signed on Wednesday.

But even as the Egyptian government sent out invitations to about 40 foreign ministers, planning to make a major celebration of the agreement giving Palestinians in the Gaza Strip and West Bank town of Jericho limited self-rule, the parties involved were cautious about the prospects for a deal.

Israeli Foreign Minister Shimon Peres warned that nothing would be certain until the last moment, and Palestine Liberation Organization (PLO) Chairman Yasser Arafat pointed out that ``there are still problems that have not been settled.''

In intensive negotiations at the end of last week, brokered by United States Secretary of State Warren Christopher, Israel offered the Palestinians some of the symbolic trappings of statehood that Mr. Arafat will need to convince an increasingly skeptical Palestinian public that autonomy means something.

The autonomous entity, initially confined to Gaza and Jericho, but due to be extended to the whole of the West Bank, will have its own international telephone dialing code, for example, and will issue its own stamps, according to officials at the talks.

Residents of the autonomous area will also carry their own passports, if the PLO gets its way, although this point still has to be finalized, according to a senior US official close to the negotiations.

Replacing the Israeli soldiers who have patrolled Gaza and Jericho for the past 27 years will be 9,000 Palestinian policemen, the two sides have agreed, 5,000 of whom are due to arrive in the first few weeks of self-rule. The first contingent is expected in the occupied territories on Thursday, as soon as the agreement has been signed.

Chief Palestinian negotiator Nabil Shaath conceded that the deal he has nearly wrapped up falls well short of traditional Palestinian aspirations for independence. But he defended it against critics in the occupied territories who have said it merely turns the PLO into an agent for continued Israeli occupation.

``It is a start, not a complete start, and it does not fulfill all our hopes, but it is a beginning in the right direction,'' Mr. Shaath told reporters.

``We are a people under occupation who are getting our independence in very small doses,'' he added.

In the meantime, however, a number of outstanding issues remain to be resolved before Israeli Prime Minister Yitzhak Rabin and PLO leader Arafat put their signatures to the autonomy accord in Cairo on Wednesday.

Two of those issues have been left for the two leaders to decide at a last minute meeting on Tuesday evening - the exact size of the Jericho area that will enjoy autonomy and whether the Palestinians will have the right to station a policeman on the Allenby bridge leading from Jordan to the autonomous area around Jericho.

Before that summit, the negotiating teams still must reach agreement on the extent of Israeli jurisdiction in the autonomous areas - Israel is demanding jurisdiction over its own citizens and foreigners even outside Jewish settlements in the Gaza Strip. The Palestinians say this would undermine the whole concept of autonomy.

Also undecided so far is the physical size of the security strips around the settlements, into which Palestinians would not be allowed to go, and the extent to which Palestinians will have freedom to navigate the Mediterranean waters off the Gaza coast.

Even more complex is the contentious issue of Palestinian prisoners. While Israel has agreed to release 5,000 of the 8,000 Palestinians held for political offenses within three weeks of an accord, the PLO is demanding that all prisoners belonging to the radical Islamist group Hamas be freed as well.

That might be possible, Israeli officials have said privately, if such prisoners were prepared to sign a pledge renouncing violence, and so long as they had not killed or wounded Israelis.

Economic questions, though, key to future relations between Israel and the Palestinians, have been resolved in an agreement signed last Friday in Paris.

The deal does not give the Palestinians the currency of their own that they had wanted. But it does give them wide authority over economic and financial affairs, enabling them to set their own customs duties and taxes.

Palestinian farmers will be able to sell their goods freely on the Israeli market, except for a handful of items for which quotas have been set. And manufactured goods will move freely across the borders.

Signing the agreement with Israeli Finance Minister Avraham Shochat, Palestinian negotiator Ahmed Qurie, also known as Abu Alaa, urged investors to help rebuild the occupied territories.

``I also call upon the private sector, that the door is open now to investment for a Palestine, which will be a democratic entity where a liberal market economy will be applied,'' he promised.