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Publisher\Editor Don Canaan

                      Sept. 3, 1996 V4, #162
All the News the Big Guys Missed

Israel Follows Iraqi Developments

The Israeli military is following the events in northern Iraq very closely, but emphasized no immediate threat to the security of Israel is foreseen. Iraqi forces are attacking the last strongholds of the Iranian-backed Kurds. United States sources said that they do not believe Iraqi promises to evacuate the captured cities "very soon."

Negotiations Continue for Arafat/Netanyahu Meeting

By Al Pessin (VOA-Jerusalem)

Negotiations between representatives of Palestinian leader Yasir Arafat and Israeli Prime Minister Benjamin Netanyahu ended Monday, without a date set for a meeting between the Palestinian and the Israeli.

Arafat told reporters Monday he hoped the two sides could "reach common ground," but added caustically that "it takes two to tango."

After a week of Israeli moves to implement the new government's policies, Palestinian protests and harsh rhetoric from both sides, the Jerusalem Post reported Sunday the two sides were close to reaching an important set of understandings -- and Israeli Prime Minister Benjamin Netanyahu hinted the report was true.

Negotiators are trying to decide which issues can be discussed during a meeting between Arafat and Netanyahu. Those issues include: An easing of the closure of Palestinian territories, the opening of a Palestinian airport in Gaza with Israeli security controls and an agreement to negotiate changes in the withdrawal plan for the West Bank town of Hebron, which the previous Israeli government had agreed to.

Once that is done, the report says, Israel promises to proceed with further but unspecified troop withdrawals on the West Bank, as promised in the latest peace accord, as well as expansion of Jewish settlements in the West Bank and Gaza, and the status of east Jerusalem, which the Palestinians want as a capital.

News reports say agreement on those points is to be capped by the first meeting between Arafat and Netanyahu, perhaps sometime this week. Netanyahu told an Israeli radio interviewer there are developments in progress and to be patient for a few more days. Netanyahu has refused to meet with Arafat ever since the peace process began three years ago, and said he would do so as prime minister only if necessary. Many Palestinians would see such a meeting as an acknowledgment by Netanyahu that he has to continue the peace process with Arafat, whether he likes it or not.

These most positive indications in the Israeli-Palestinian peace process since the new government took office two months ago came after a week during which the peace process appeared to be in crisis. Israel destroyed a Palestinian building in Jerusalem's Old City, which it said was built without a permit, and it announced the first concrete plan to expand a West Bank settlement. Arafat responded by calling the first Palestinian protest strike in three years and by calling on Palestinians to flock to Jerusalem to pray on Friday. That last effort fizzled because of a massive Israeli security effort and some apparent indifference among ordinary Palestinians.

Still, the difficult week led to a flurry of diplomacy involving back-channel contacts between senior Israelis and Palestinians, as well as mediation by US, French, Jordanian and Egyptian officials, and appears to have pushed the two sides closer together.

Tunnels highway opens

A new highway - "The Tunnels Highway" - was dedicated Monday. The highway, with two tunnels 2,925 feet and 877 feet long, respectively, connects Gush Etzion with Jerusalem, without the necessity to pass through Arab villages. The highway also passes over an 1,137-foot long bridge, the longest one in the country. The Tunnels Highway venture was begun during the Shamir government, and the Labor government decided to carry on with it.

Israel Aircraft Industries to Supply US Air National Guard

Israel Aircraft Industries reported that its Astra SPX commercial jet has been chosen for supply to the US Air National Guard. IAI, acting as a sub-contractor, will supply two of these ASTRA jets to Tracor Flight Systems, which is the main contractor. The contract contains an option for the purchase of two more ASTRA jets.

New School Year Starts

Approximately 1.7 million students began the new school year Sunday. Israel's education system is comprised of 2,850 schools and employs 106,000 teachers. The education budget for the 1997 fiscal year is 18 billion shekels (approximately $5.67 billion).

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