July 11, 2002	Thursday	Rabi-us-Sani 29, 1423

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AL QUDS, July 10: An Israeli official said the government was considering unblocking the Palestinian Authority taxes and customs revenues frozen by the Jewish state since violence resumed in earnest in September 2000.

The move was discussed by Peres and Fayad in their first meeting on Monday, as a possible way to tackle the economic crisis in the Palestinian territories where overall unemployment is more than 40 per cent and rising, he said.

“We are considering this move, but it has not been finalized, there is no agreement,” said the Israeli official, who asked not to be named.

“On the other hand, we want to be sure that the money does not serve other purposes, like terrorism, either directly or indirectly.”

The plan appears to the first large carrot dangled by Israel to the Palestinian Authority since Arafat started his reform programme, in which US President George W. Bush said he has discerned signs of progress.

But a senior Palestinian official insisted that Peres had nothing “serious” to offer in his talks with the new Palestinian ministers.

“Peres came to these talks without anything in his hand,” information minister Yasser Abed Rabbo told a press conference in Ramallah.

The Palestinian Authority would be unable to continue security and other reforms if Washington failed to pressure Israel into lifting its siege of Palestinian land, he warned.

“The key is in Washington’s hands,” information minister Yasser Abed Rabbo told the press conference.

“We ask Washington to change its policy (toward Israel) or there will not be reform or any security,” Abed Rabbo warned.

He said Arafat had sent a message to the so-called quartet of the United States, Russia, the European Union, and the United Nations warning that continuing reforms “will not be possible if Israel continues the siege.”

Ministers from the United States, the EU, United Nations and Russia are expected to meet in New York on July 15.

“Our message to the world is we took serious steps in reform, and we will continue them and we will implement our 100-day (reform) plan,” Abed Rabbo said.

“But Israel’s punishing procedures prevent us from implementing this plan,” he said, referring to the siege and occupation.

TWO KILLED: An Israeli officer and a Palestinian teenager were killed in separate clashes on Wednesday despite a lull in violence that has raised hopes for reviving peace talks.

The violence came amid efforts to keep incipient Palestinian- Israeli talks on track and inter-Arab consultations ahead of an international gathering next week on the Middle East crisis.

The meeting in New York will involve the United States, Russia, European Union and the United Nations.

In Amman, Jordanian Foreign Minister Marwan Moasher said that Arab participants in the talks — Jordan, Egypt and Saudi Arabia — will demand clear “mechanisms” for a peace settlement.

But Israel is first stressing reform of Palestinian institutions and increased security as its forces end a third week of reoccupation of Palestinian West Bank towns in a bid to stop suicide bombings.

On Wednesday, an Israeli army officer was fatally wounded when Palestinians opened fire on his unit in the Gaza Strip and a Palestinian teenager was killed by Israeli fire in the West Bank.

Captain Haim Lev, 24, died of his wounds, Israeli sources said. His unit was on routine patrol searching for tunnels used to smuggle arms across the border with Egypt, when it came under fire from the gunmen on a nearby building.

In the West Bank, Rami Kutush, a 19-year-old refugee, was killed and two other Palestinians wounded by Israeli gunfire during clashes in the Askar camp near Nablus, Palestinian medical sources said.

Another Palestinian was shot and wounded by Israeli troops in the village of Alar, near Tulkarem, after they imposed a curfew on the village and began search operations, witnesses said.—AFP