Mid-East faces 'moment of truth'

The Palestinian uprising shows little sign of subsiding

The head of Israel's negotiating team in Washington says the "moment of truth" has arrived in Middle East peacemaking, after the latest round of talks with the Palestinians.

The Palestinians expressed pessimism over the future prospects for peace after the talks ended with major differences unresolved.

We must decide whether we look away or take a very penetrating look at reality

Israeli FM Shlomo Ben Ami

"We and the Palestinians now face the moment of truth following the work we've done with the Americans," said Israeli Foreign Minister Shlomo Ben-Ami on Israeli army radio.

"We must decide whether we look away, or take a very penetrating look at reality and understand that there is no such thing as a free lunch in achieving peace," he said.

The major sticking points in the negotiations were the status of Jerusalem and the return of Arab refugees.

Five days of talks were capped by a joint meeting in the White House with President Clinton, who is eager to achieve an historic Middle East peace deal before he leaves office on 20 January.

Jerusalem sovereignty

Before the White House meeting there had been reports that Israel was ready to make a key concession, recognising Palestinian sovereignty over the Muslim holy places on the Temple Mount in Jerusalem. But there was no mention of that after the talks.

Ben-Ami: "Encouraging" talks, despite differences

White House spokesman PJ Crowley said the US would make no decisions until both sides reported back after assessing Mr Clinton's ideas.

"It's premature to talk about a summit until there is real progress on the substance," he said. The two sides are due to respond by Wednesday

Mr Ben Ami sketched out a possible schedule under which separate talks could take place with the US at the end of next week, with a possible three-way summit the following week.

Israeli press reports said the US proposals involved Israel ceding control over the Al-Aqsa mosque compound and Arab neighbourhoods in occupied east Jerusalem.

The Palestinian side denies it has negotiated about waiving the right of return of Palestinian refugees - the major concession reportedly expected from them under the US plan.

Time pressure

Time could be running out for a deal, as Mr Clinton leaves office next month and the Israeli Prime Minister, Ehud Barak, stands for re-election in February.

Our Jerusalem correspondent says Israelis are unsure of who their political leaders will be in the long-run and many Palestinians have lost faith that any negotiations will bear fruit.

Arafat's strategy is being questioned by his own supporters

There has been veiled criticism of Mr Arafat's strategy of holding peace talks while violence continues unabated in the West Bank and Gaza Strip.

An increasingly prominent leader of Mr Arafat's Fatah faction, Marwan Barghouti, has called for the formation of a Palestinian government of the intifada, implying that he wants extremist Islamic groups, such as Hamas, to play a role in the Palestinian government.

Two Palestinians died on Saturday from wounds received earlier this month and there were sporadic clashes in the West Bank and Gaza.

On Sunday, hospital sources said the mutilated body of a Palestinian man was found near the West Bank town of Ramallah.

Members of the man's family said they believed Jewish settlers had killed him, but they could provide no evidence.

At least 350 people - mostly Palestinians - have died in three months of Israeli-Arab violence.