To: Clappy who wrote (50870 ) 5/2/2002 6:53:18 PM From: stockman_scott Respond to of 65232 Powell Announces Mideast Conference By BARRY SCHWEID, AP Diplomatic Writer Thu May 2, 5:17 PM ET WASHINGTON (AP) - President Bush (news - web sites) set tough terms Thursday for a Palestinian state, saying it must be democratic and not based on a foundation of terror and corruption. Bush, at a news conference, also renewed his description of Israel's hold on the West Bank as an "occupation" and said it must yield to Palestinian statehood. Secretary of State Colin Powell (news - web sites), after meeting with U.N., European and Russian officials, announced they had agreed to hold an international conference early this summer to try to advance the peace efforts. Meanwhile, Powell urged Israel to lift restrictions on Palestinian travel and said Palestinian leader Yasser Arafat (news - web sites) should take steps to bring calm to the region since he's now free from Israeli confinement. "Mr. Arafat, I hope, will understand that he doesn't have any more chances to seize this kind of opportunity," Powell said. Bush, too, called on Arafat to "show he can lead." "I'm optimistic we're making good progress," the president said. "After all, a week ago, Yasser Arafat was boarded up in this building in Ramallah. ... He's now free to show leadership." Bush was not specific about how much land he wants Israel to relinquish for a Palestinian state. That critical issue is likely to be aired at a White House meeting Tuesday with Israeli Prime Minister Ariel Sharon (news - web sites). Last month, in demanding Israel reverse its incursion in search of terror suspects, Bush said "the occupation must end" in accord with 1967 and 1973 U.N. Security Council resolutions. The resolutions did not specify whether Israel ought to withdraw totally from the land the Arabs lost in the 1967 Mideast war and failed to regain in the 1973 conflict. But Arab and European leaders are insisting on a complete pullout. U.N. Secretary-General Kofi Annan (news - web sites) has called Israel's actions in the area illegal. Bush did not. Annan, standing alongside Powell at their joint news conference, said he expected a U.N. report to be prepared on Israel's attack on the Jenin refugee camp "even if you cannot get on the ground." Annan decided on Wednesday to abandon an inspection mission because of Israeli opposition. Bush was unusually tough on what he expects of the Palestinians. Against a backdrop of criticism of the Palestinian Authority (news - web sites), sometimes even among Palestinians, Bush laid down markers for the future. "A Palestinian state must be achieved by negotiation of an end to occupation," he said. "And such a state cannot be based on a foundation of terror or corruption." "A Palestinian state must be based on the principles that are critical to freedom and prosperity: democracy and open markets, the rule of law, transparent and accountable administration and respect for individual liberties and civil society." He said his aim was a Palestinian state at peace with Israel and living up to the best hopes of the Palestinian people. Bush said important progress was being made toward ending the violent standoff in the Middle East. Speaking after a meeting with European leaders, the president said he expects more progress when he meets in Washington next week with Sharon and King Abdullah II of Jordan. European Union (news - web sites) leaders, meeting with Bush on trade and other issues, gave their backing to the U.S. diplomatic efforts. "We attach the utmost importance to the work that we can do jointly in the Middle East," said Spanish Prime Minister Jose Maria Aznar, who currently holds the presidency of the European Union. Still, a bloody skirmish at the Church of the Nativity in Bethlehem dampened hopes for prodding Israel and the Palestinians into negotiations. American intermediaries are working with the two sides, trying to revive a formula for ending Israel's siege of the shrine, first by determining how many terror suspects are holed up inside and then deciding how to deal with them, said a senior U.S. official. Israel has offered the wanted men exile or trial in Israel, but the Palestinians are unlikely to choose an Israel trial, the official said. Powell seemed optimistic this week that a breakthrough would follow the freeing of Arafat from Israeli house arrest. But Israeli troops fired at Palestinians walking into Manger Square, killing one and wounding at least two who staggered back into the shrine, the army said. Palestinians returned fire. Until the Bethlehem incursion is resolved, efforts to work out new security arrangements and consideration of another trip by Powell to the region are on hold. Meanwhile, the White House chided Arafat for condemning Israel as "terrorists, Nazis and racists" and said it would be better for all sides to focus on peace issues. The mild reprimand was delivered by spokesman Ari Fleischer (news - web sites) in Bush's behalf. Emerging from Israeli house arrest, and hearing of the fighting at the Church of the Nativity, Arafat angrily accused Israel of willfully damaging the shrine. "The president thinks the important step for all ... parties is for them to now ask themselves what can they do to bring peace to the region, not what can they do to speak ill of others," Fleischer said when asked about Arafat's rhetorical blast at Israel.