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Friday, 14 July, 2000, 15:56 GMT 16:56 UK
Analysis: The bottom line
US Secretary of State Madeleine Albright and Israeli PM Ehud Barak
Negotiations: Madeleine Albright with Ehud Barak
By diplomatic correspondent Barnaby Mason

Officially, the Palestinian leader Yasser Arafat demands that Israel should give up all of the West Bank and Gaza, which it seized in 1967.

Mr Arafat points to the precedent of the Israelis handing back the whole of Sinai to Egypt and to UN Security Council resolutions requiring Israeli withdrawal.

But the Israelis point out that the English text of the key resolution - 242 - talks of withdrawal from occupied territories, not from all the territories or even THE territories.

One of Ehud Barak's so-called red lines is that there will be no return to the pre-1967 borders.

Control

So how much might he be prepared to give up?

According to the Israeli press, unconfirmed by the government, Mr Barak would be prepared to see the Palestinians control 80-90% of the West Bank.

Israeli soldiers on patrol
Israeli troops patrolling Jerusalem, a key stumbling block
He would abandon smaller Jewish settlements, but annex three big blocs containing perhaps 130,000 settlers under Israeli sovereignty.

In practice, Mr Arafat is believed to accept the continued existence of some settlements as inevitable.

Israeli handover

Palestinian officials have suggested that in exchange the Israelis should give up chunks of land in Israel proper.

But Israeli officials say that would encroach on their sovereignty.

At the moment, Mr Arafat's Palestinian authority has at least partial control of 40% of the West Bank and two-thirds of the Gaza Strip.

Patchwork state

But it is a patchwork, a string of islands separated by seas of Israeli authority and ever-growing Jewish settlements.

Arafat, Clinton and Barak
The three leaders get together at Camp David
Palestinians fear that the state they have dreamt of for so long might end up being little different from the Bantustans in apartheid South Africa.

In their meetings at Camp David this week, the two leaders also have to tackle the question of the eastern border of the Palestinian state, adjoining Jordan.

Israel wants the Jordan Valley as its own security border, but officials have hinted that its security cordon could eventually be reduced or phased out.

The bargaining over land is just one part of a wider negotiation and there are bound to be trade-offs between different issues.

One thing is certain: if an agreed Palestinian state does emerge, it will be an extremely peculiar creation.

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