Arafat key role in new policies

The new Palestinian cabinet will be jointly appointed by President Yasser Arafat and his new premier and will include a Hamas supporter and a United States favourite, officials said on Thursday.

"The government will be formed next week," a Palestinian official said.

The decision by Arafat's Fatah faction to leave the naming of the 24-seat cabinet to the president and prime minister designate, Ahmed Qurie, means that Arafat, whom Washington hoped to sideline, will play a major role in shaping the next government.

But President George Bush has laid blame on Arafat for the stalled peace process, branding him a "failed leader". Speaking to reporters at Camp David, where he held talks with King Abdullah of Jordan, Bush said Arafat had sabotaged the efforts towards peace made by the former Palestinian Prime Minister, Mahmoud Abbas, who resigned from his post on September 6. The President, who reaffirmed his commitment to reaching a two-state solution to the conflict, said that Abbas had been "undercut by the old order", referring to Arafat. "Hopefully, at some point in time, a leadership of the Palestinian Authority will emerge which will then commit itself 100 per cent to fighting off terror," Bush added.

"Arafat has failed as a leader ... The people of the Palestinian territories must understand that if they want peace, they must have leadership who is absolutely 100 per cent committed to fighting off terror.

"I remain committed - solidly committed - to the vision of two states living side by side in peace and security. Yet that will only happen with new Palestinian leadership committed to fighting terror, not compromised by terror," he added, with King Abdullah standing at his side.

Bush's remarks came as Arafat launched a charm offensive via the Israeli media. In television and newspaper interviews from his beleaguered Ramallah headquarters, the Palestinian leader offered a new ceasefire. "Enough blood," he said, "enough of the destruction and of the daily suffering." He said Islamic Jihad was ready to stop its attacks and that he was negotiating a deal with Hamas.

Israel's Foreign and Defence Ministers, Silvan Shalom and Shaul Mofaz, summarily rejected the truce, arguing that the Palestinians must first act to rein in the militias. But Binyamin Netanyahu, the Finance Minister, suggested that Israel should consider it - if only to win time to complete its contentious West Bank security fence.

Arafat spurned any idea of dismantling the terrorist infrastructure. "This is not an infrastructure," he told the mass-circulation daily Yediot Aharonot. In an interview that referred to a poll that found 37 per cent of Israelis favoured killing him, Arafat said Israelis should be ashamed for wanting him dead.

Qurie said he would continue consultations with Palestinian groups about ministerial appointments.

"I want a government supported by the Palestinian people and the Palestinian leadership," he said after the Fatah meeting.

Meanwhile, the violence continued. Israel troops killed Jihad Abu Shwairah, a local Hamas military leader, during a gun battle in the Nusseirat refugee camp on Thursday.

It was the first attack by ground forces in Gaza since the Palestinians announced their aborted ceasefire at the end of June, but Israel has killed 19 Hamas activists and bystanders in air strikes there since mid-August, when a suicide bomber killed 23 civilians on a Jerusalem bus.

On the West Bank, Israeli infantrymen backed by tanks entered the village of Tubas, near Nablus, and arrested a man and a woman they said were planning to carry out suicide bombings.

In Gaza, Hamas supporters and Palestinian security forces traded gunfire after the arrest of seven of the militant group's members suspected of kidnapping a policeman, a statement and witnesses said.

Hamas supporters attacked police stations with stones and burned tyres and cars after the forces rounded up the Hamas members. Hospital officials said 10 civilians and two policemen were wounded.

The 191-nation UN General Assembly is expected to meet in emergency session today to take up a request by Arab nations for a vote on their demand that Israel stop threatening Arafat.

- INDEPENDENT and REUTERS