The news from Israel over the past two weeks has been more reminiscent of the pre-peace accord days of the early nineties than what has been the norm of late. Palestinians are throwing rocks at Israeli soldiers, the soldiers reply with tear gas, suicide bombers in Tel Aviv and a chill in relations between Israel and Jordan. For more on this story, Margaret Warner talks to an Israeli diplomat and a Palestinian representative in Washington following a backgrounder.
 A RealAudio version of this NewsHour segment is available.
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MARGARET WARNER: It has been a violent weekend in the Middle East. On Friday a suicide bomber set up a blast in a crowded Tel Aviv cafe, killing himself and three Israelis and wounding dozens of others. It was the kind of attack not seen in Israel for nearly a year. The Islamic group, 
Hamas, claimed responsibility. Throughout the weekend and again today hundreds of Palestinian demonstrators clashed with Israeli troops. In some places Palestinian police tried to help quell the demonstrations but with little success. Israeli Prime Minister Benjamin Netanyahu put the blame for Friday's suicide bombing and the subsequent unrest squarely on the shoulders of Yasser Arafat's Palestinian Authority.
BENJAMIN NETANYAHU,
Prime Minister, Israel: Every time there's an impasse or the Palestinians have a grievance against us, they send terrorists -- in this case they were sent with a green light from the Palestinian Authority on what we have absolute information--and they blow up our people. That is not a peace process.
MARGARET WARNER: Specifically, Israeli officials fault Arafat for releasing known Islamic extremists from Palestinian jails, and they say he has quietly encouraged them to commit violent acts. Arafat publicly condemned Friday's suicide bombing. And he and his lieutenant denied doing anything to encourage the violence. The Palestinians blame the unrest on Netanyahu's decision to launch a new Jewish housing project in Arab East Jerusalem. Ground-breaking for the project began last week.
HANAN ASHRAWI, Palestinian National Authority: I stand before you wracked by the knowledge that the Palestinian-Israeli peace process is in serious jeopardy; that violence is unleashed on our world claiming the lives of innocents on both sides; that the extremism of the Israeli government is feeding extremist elements among us.
MARGARET WARNER: The development, called the Har Homa by the Israelis and Jabal Abu Gheneim by the Arabs, will ultimately house some 30,000 Jewish residents. The Israeli decision stirred outrage among Palestinians when it was announced in late February. Since that time the Israeli-Palestinian peace process has suffered several setbacks. President Clinton expressed dismay over Israel's plans during a visit to Washington early this month by Palestinian Leader Arafat.
PRESIDENT CLINTON: I would prefer the decision not have been made because I don't think it builds confidence. I think it builds mistrust, and I wish that it had not been made.
MARGARET WARNER: Prime Minister Netanyahu refused to reconsider. He responded to Clinton's criticism on March 5th by ordering the closing of four Palestinian offices in East Jerusalem. In turn, on March 9th, Arafat rejected Israel's offer to withdraw from an additional 9 percent of the West Bank, saying it was too small. Palestinian authorities refuse to take charge of the territory. Heightened 
tensions prompted Jordan's King Hussein to rebuke Netanyahu in an angry and anguished personal letter which was leaked to the press on March 11th. The king's letter accused the Israeli prime minister of "continued deliberate humiliation of your so-called Palestinian partners" and warned of an abyss of bloodshed and disaster ahead. "How could I work with you as a partner and true friend," the king wrote, "when I sense an intent to destroy all I worked to build." Netanyahu responded with a letter of his own, saying he was baffled by the personal level of Hussein's attacks against him and urging the Jordanian king not to automatically adopt the Palestinian position. Then on March 13th, 
there was bloodshed. A Jordanian soldier fired on a group of Israeli schoolgirls touring a scenic border outpost called the Island of Peace. Seven girls ages 12 and 13 were killed. Six more were wounded. There was one attempt at reconciliation in the days after the slain schoolgirls were buried. King Hussein, accompanied by Netanyahu, made emotional visits to the homes of all the victims' families. But in the days since then there's been little evidence of reconciliation anywhere in the region.
MARGARET WARNER: Now the Israeli and Palestinian perspectives on all this. They come from Shlomo Gur, the deputy chief of mission at the Israeli embassy, and Khalil Foutah, the deputy chief representative of the Palestinian Liberation Organization in Washington. Welcome, gentlemen.
Mr. Gur, starting with you, the reports from the regions say that your government is calling for a crackdown on the Islamic militants. What specifically do you want Yasser Arafat to do now?
SHLOMO GUR, Israeli Embassy: We made it clear that actually for him to stand up to his commitment 
to fight terrorism, as we agreed upon in the Declaration of Principle that was signed in 1993. Actually, one thing has to be clear; that terror and peace are incompatible. Once they took a decision, strategic decision, to embark on the path of peace, you have to pursue your goal next to the negotiating table. And you cannot resort neither to violence nor to terror. And to your question, we want very specific things: One is to increase the cooperation between the Palestinian security authorities and the Israeli security authorities. And actually, as you reported in your presentation earlier, Mohammed Anan, the head of the security in Gaza said he is not going to do that. The other thing that we have asked is to arrest, or to locate, to arrest, and prosecute terrorists.
MARGARET WARNER: Are you--are you asking for the re-arrest of this more than 100 Islamic extremists, or your government, that were in jail that Arafat has released?
SHLOMO GUR: What we are asking is that anyone who is involved in terror would be arrested and prosecuted. Everyone, every organization that we've engaged in terror has to be cracked down. That's why we are asking that an additional demand is to crack down on the terrorist organization and its infrastructure and to stop the policy of revolving doors, meaning to arrest somebody and the next day to release them because that is being understood by them as that famous green light that we were talking 
about, because if there's a meeting between Arafat and the terrorist organization, that took place on the 9th of March in Gaza, they understood, the terrorists understood that terrorism would be tolerated, and if that happens, and the next move is to release thousands of--of Palestinians, and of people who engaged in terrorism, and one of them, if you want, came out and immediately so that the only way to achieve the goal is by Jihad, is by killing Israelis wherever they live, whether it is in Tel Aviv--that was before they attacked--or in Latin America. And it was not accidental that he used Latin America, because that was exactly five years to the terrorist attack on our embassy in Buenos Aires.
MARGARET WARNER: All right. Are these demands or proposals or requests something that the Palestinian Authority can meet?
KHALIL FOUTAH, Palestine Liberation Organization: Let me just say in answering your question and 
the comments that has been said, we are partners in peace, first of all, the two sides. Our relation with the Israelis, it's not relation on the security issues only. It's--it has economic, political, security issues. We are partners in peace. We are trying to achieve a comprehensive peace from settlement for the Arab-Israeli conflict. And I want to state here the opposition of the Palestinian National Authority under President Arafat, that we are still committed to that peace process. And we condemn terrorism. We've condemned what happened in Tel Aviv, and terrorism is not our policy. And it's not going to be our policy at all because we already choose the path of peace. And--
MARGARET WARNER: Do you think they're asking for the wrong thing?
KHALIL FOUTAH: Regarding what they're asking for, okay, regarding what they're asking for, we have also demands, so we are partners, and the peace process can't really go and succeed on one leg. It has to have two legs to move forward. And we ask also the Israeli government to refrain from taking unilateral decisions regarding very sensitive issues like the issue of Jerusalem and the settlement activities because this is--this is what caused the whole violent situation that we witness right now.
MARGARET WARNER: All right. I want to get to that issue. But are you saying that until Prime Minister Netanyahu agrees to say postpone that development, you're not ready to respond to the demands about terror?
KHALIL FOUTAH: 
I'm saying that security is two-way street. It's not one-way street. Security for the Palestinians and for Israelis and the whole peace process in danger, what's going on right now is very dangerous and it could derail the whole peace process. This is not our objective. We want this peace process to succeed, and we want the Israelis to be partners with us, but they have to reconsider their decisions and to try to re-evaluate the whole situation.
MARGARET WARNER: And otherwise--
KHALIL FOUTAH: They tried before. They tried before, and we tried before. Violence is not going to make any result and this is--we know it. We know it. We are in this peace process for good, and hopefully it will succeed after we review this current situation.
MARGARET WARNER: All right. Let's look at the other leg of this, which is this housing development. Why is the Israeli government--explain to people who don't follow this every day why the Israeli government is so determined to go ahead with this development.
SHLOMO GUR: Let me say one thing regarding what Khalil just said, and I fully agree with him. The 
process stands on two legs, and therefore, we have to sit and negotiate all the issues on the table, but the only way, the only way to resolve those problems is at the negotiating table, not in the street, and definitely by not terror. And as long as terror is being even considered as an option, there's no way that the peace process will be successful, because, as Khalil knows very well, and we've been--we've gone together a long way--this peace process has its ups and its downs. And we had high points and low points, and at the low point, it's only when we sat and tried really to find very creative ways to come out of problems and creative ways to find solutions to the existing problems, that we were able to move forward.
MARGARET WARNER: All right.
SHLOMO GUR: But never, never to resort to violence because once you resort to violence, the process will--is deteriorating.
MARGARET WARNER: All right. But you're both agreeing violence is terrible, yet it's occurring, so let me just ask you now, for instance, about this development and just explain why is it so important for the Israeli government to go ahead for it.
SHLOMO GUR: I think one thing has to be clear; that the question of Jerusalem was left, and 
intentionally so because it's one of the hottest problems, to the final status negotiation. Nowhere in the agreement it says that until then the city will freeze and choke and there will be impossible to enable the people of Jerusalem to live and to develop. And that's exactly what happened. There is building in Jerusalem for Jews and for Arabs, and it will continue to be so until there will be a solution. It does not preempt any result of the negotiations. We have a very firm and a clear position on Jerusalem. And I know the Palestinians have a very clear position on Jerusalem. And that will be resolved at the negotiating table at the final status negotiations. Until then the city has to live. It will continue to live, and building in Jerusalem does not contradict the agreement, and, therefore, any arguments, any discussions with regard to that, will be found in solutions at the negotiating table, and once again, not in terror. And let me remind once again one important issue because now the reason for terror is being alleged to be the construction in the Har Homa. Exactly a year ago--and it's exactly a year ago that we had this terrible wave of terrorism--there was no the Har Homa at that time. There was no--there was no building in anywhere in Jerusalem or elsewhere. So the--the resort is to terrorism, has to be totally--totally abandoned.
KHALIL FOUTAH: Let me just, again, confirm here that tourism is not our policy, and we don't 
condone it. We condemn all kinds of terrorism. Okay. We are committed to the peace process. Jerusalem is--is supposed to be the final negotiation issue to discuss, and let me just also state here about the agreement. The agreement says in the Declaration of Principle, neither party should do any--create new facts on the ground that could preempt or abridge the results of the final status negotiations, which is Jerusalem and the settlement and the border and the security issues. So it is really very clear. This is not our reading of the agreement. Our agreement of the agreement, Jerusalem should be for the final status negotiations. It is covered under the 242, the United Nations Resolution 242 and 338, and we should discuss it when we start talking about the final status negotiation. And we have our claim on Jerusalem. We have their claim. We'll settle it on the negotiating table peacefully.
MARGARET WARNER: All right. The administration here is talking about perhaps sending special Mideast negotiator Dennis Ross back. My question is, very briefly, what does he have to work with? I mean, if the United States gets re-involved right at this stage, what can the United States do?
SHLOMO GUR: The United States played a very important role, and I think we both appreciate the role. I think what they have to do now is (a) to ensure that terrorism will cease completely and forever, and that 100 percent of the effort will be taken in order to eradicate it, and once that is being done to move forward with the many issues that we have on the table, the outstanding issues of the interim agreement and the results of the final status negotiations.
MARGARET WARNER: What do you think that the United States can do?
KHALIL FOUTAH: I think the United States should take a bigger role in this. This is very serious, what's going on right now. It could derail the whole peace process, and they should really send somebody, a special envoy there, and try to get the parties to the negotiating table, and to ask the Israelis to reconsider their policies regarding their settlement policy and Jerusalem.
MARGARET WARNER: All right, gentlemen. We'll have to leave it there. Thank you both very much.
