Israeli and Palestinian leaders made "substantial progress" yesterday towards a West Bank pullback and will continue their talks at an open-ended Washington summit starting 15 October, US Secretary of State Madeleine Albright announced. Albright spoke after Israeli Prime Minister Binyamin Netanyahu and Palestinian leader Yasser Arafat met for nearly four hours at the Erez crossing point between Gaza and Israel and later at a Palestinian guest house in Gaza, in their most extensive talks in a year. Albright said that a "new spirit was very evident" in the meetings. She noted that the two leaders spontaneously decided to extend their talks over lunch at a nearby Palestinian guest house and that Netanyahu crossed into Palestinian-controlled territory for the first time in order to join Arafat in the meal. Albright cautioned, however, that "an awful lot of problems still have to be resolved and those are the kind the leaders have to resolve while we are in Washington." During the two-hour meeting at Erez, Albright twice left the room to allow Netanyahu and Arafat to talk in private. It was the first time in a year that Arafat and Netanyahu spoke without mediators. Asked about the talks, Albright said: "They are moving on", and Netanyahu described them as "good". Initially, Netanyahu was to return to Jerusalem and only Arafat and Albright were to have lunch together. But in a last-minute change of plans, the Israeli premier stayed on to continue talks over lunch. At the start of the three-way meeting, the three sat around a square table so small their knees and elbows were almost touching. Posing for photographers, Netanyahu and Arafat shook hands across the table and Albright placed her hand on top of theirs. Albright's spokesman, James P. Rubin, said Albright faced dozens of hurdles in her second day of Mideast peacemaking with Netanyahu and Arafat. Any hope of concluding an agreement while Albright was in the region had been ruled out in advance. But she hoped to materially narrow the gap on a number of unresolved issues, most particularly security measures to shield Israel from terrorism, in advance of the White House summit. Albright wanted to find out whether Arafat was ready to inch closer to Netanyahu's view, which the United States basically shares, that the Palestinian Authority could do more to control militants on territory under its control. After a two-hour session at the crossing, the talks shifted to Arafat's guest house in Gaza. Albright said Tuesday there were tough choices that both sides have to make before US President Bill Clinton hosts the summit. The location may be the Wye Plantation, or somewhere else in the Washington area. Netanyahu has basically agreed to relinquish 13 per cent of the West Bank, on top of the 27 per cent previously promised to the Palestinians, with 3 per cent set aside for a nature reserve that will be under joint Israeli-Palestinian security control. But with security and other issues still up in the air, Rubin insisted that the peace process is not yet back on track. "I think we envisage the summit as a multi-day exercise where some heavy lifting is going to be required," Rubin said Tuesday. "We do not envisage it as a photo-op in which everything is pre-cooked." Albright was scheduled to leave the Middle East last night, leaving behind US mediator Dennis Ross and Assistant Secretary of State Martin Indyk for further talks with Israeli and Palestinian officials. Whatever the outcome, Albright said the United States intends to pursue a better relationship with the Palestinian Authority "for its own sake". "We have thought for some time about increasing the level of discourse," she said. But she declined to say whether the administration was setting the stage for future dealings with a Palestinian state. Heading into the meeting at Erez, Arafat blamed Israel for the continued deadlock in the negotiations. Addressing a gathering of UN officials in Gaza City, Arafat said he has long accepted a US proposal for an Israeli pullback from 13 per cent of the West Bank, in exchange for Palestinian security gestures. "Until now, the Israeli side has not given any sign of approval for the American initiative, but in spite of that we are continuing our negotiations today [yesterday]," Arafat said. Israel's main demand is that the Palestinian Authority crackdown on militants. A previous draft of a security agreement brokered by Israeli, Palestinian and US security officials was vetoed by Netanyahu. Palestinian and Israeli officials said no progress has been made on revising the document. CIA Director George Tenet has also arrived in the region and is participating in the negotiations, according to a Palestinian security official who spoke on condition of anonymity. Israel had deliberately set expectations low ahead of the Albright meeting, saying Palestinians had yet to deliver on the key issue of security. Palestinian officials said Albright hoped to announce a "mini-package" of deals on a Palestinian airport and industrial zone in Gaza, with Israeli agreement to hand over another 13 per cent of the West Bank. Casting a shadow over Albright's efforts, Netanyahu's office said he was attending a ceremony yesterday proclaiming the West Bank Jewish settlement of Ariel a city. It would be the second such settlement after Maale Adumim to have grown large enough to earn the title "city", thus entitling it to certain special privileges. The Ariel municipality said its population was now slightly over 18,000.
