Egyptian officials welcomed Israel's decision Monday to submit a festering border dispute to binding arbitration, but they cautioned that more negotiations will be necessary before bilateral relations can improve.
"There will have to be more negotiations. What we have is not a final agreement, but an agreed framework under which a lot of details will now have to be worked out," a source close to the negotiations said of the new 14-point Israeli plan for resolving major differences between the two countries.
However, the source added that, based on initial reports of the proposal, the prospects for improving Egyptian-Israeli relations look positive.
Heralds a New Phase
Government and diplomatic sources here and in Jerusalem agreed that Israeli Prime Minister Shimon Peres and Egyptian President Hosni Mubarak could start a new phase in bilateral relations with a summit meeting as soon as next month.
"We are closer (to a summit) than we were yesterday evening," Peres said in Jerusalem after the Israeli Cabinet resolution was announced at dawn following a marathon session of his senior ministers.
Peres told reporters that the agreement "will enhance the relations between Israel and Egypt. . . . It will make peace stronger, more promising and more stable."
Egypt's charge d'affaires in Israel, Mohammed Bassiouni, met for two hours Monday morning with Peres and emerged to say that he is satisfied with the Cabinet resolution.
"I think that we will start a new phase of relations between Egypt and Israel," Bassiouni said. However, the Egyptian official, who later returned here to brief Mubarak and other officials, said it is too early to talk about a summit meeting.
In agreeing to the blueprint worked out by Egyptian and Israeli negotiators to thaw bilateral relations, Foreign Minister Yitzhak Shamir's Likud faction of Israel's coalition government insisted on adding several conditions that will now have to be considered by Cairo.
Egyptian government spokesmen said they could not comment officially on the Israeli Cabinet agreement until the changes have been examined. However, a source close to the negotiations indicated that the text of the Israeli proposal is basically acceptable to Egypt, although he added that it might require a few modifications from Cairo's side.
In Jerusalem, an Israeli government official, who spoke only on the promise of anonymity, added a similar note of caution: "There are a lot of elements that weren't brought yet to the attention of the Egyptians. I can't tell you for sure if the Egyptians will accept it."
Thaw in 'Cold Peace?'
Other sources in Israel warned that the complicated package requires extensive new negotiations and those could quickly lead to new stalemates barring a thaw in the "cold peace" that has prevailed between the two countries for nearly the last four years, unless both sides remain determined to achieve it.
Sources in Cairo said an Israeli negotiating team is expected to arrive in Egypt soon to complete the framework, after which the timing and the details of specific steps to improve bilateral relations will be negotiated.
Sources close to the Israeli government stressed that despite the sometimes rancorous opposition from rightist members of Peres' delicately balanced coalition government, the prime minister was able to push through the most important element of the deal, agreement to submit to binding arbitration a long-festering border dispute over a sliver of Red Sea beachfront called Taba.
Israel has developed the 250-acre resort, installing a $35-million hotel and other amenities. It retained control of Taba and 14 other border points when it returned other areas of the Sinai captured in the 1967 Middle East War to Egypt in 1982.
Threat by Peres
Peres had threatened to bring down the government if his rightist Likud Bloc colleagues in the Cabinet failed to endorse his proposal for dealing with the Taba dispute and other outstanding issues between Israel and Egypt. Likud ministers had opposed arbitration on Taba but finally agreed to it under a series of conditions.
Mubarak, for his part, made settlement of the Taba issue a central condition for normalizing relations and sending back Egypt's ambassador, who was withdrawn in 1982 after Israel invaded Lebanon and hundreds of Palestinian refugees were killed in Beirut by Israeli-backed Lebanese Christian militiamen.
Complicated by domestic Israeli political calculations, the dispute rapidly degenerated into a chicken-and-egg stalemate that was broken only after both sides came to view its settlement as crucial to other efforts now under way to bring Jordan and the Palestinians into the peace process.
Israeli Cabinet Secretary Yossi Beilin said in a radio interview that about half of the 12-hour Cabinet debate concerned Likud demands that Israel's agreement to arbitration be linked more closely to normalization of economic, political, cultural and other relations between the two countries.
The final resolution requires that, before arbitration begins, the two sides agree on a timetable for normalization. It also makes implementation of each part of the "package deal" conditional on implementation of the whole.
Beilin said most of the rest of the meeting involved a "fairly sharp argument" over Likud's insistence that resolution of the Taba dispute include an initial phase of non-binding conciliation, a step that Egypt had previously rejected. The compromise worked out in the Cabinet session--it still must be approved by the Egyptian authorities--is that during the initial 6-to-8-month phase of arbitration, "the arbiters will proceed by means of conciliation to resolve the Taba issue."
That change may prove troublesome to Cairo. Mubarak, in a letter to Peres last month, agreed to Israel's request to try conciliation for a limited period before going to binding arbitration. However, sources close to the negotiations indicated that he was thinking in terms of weeks, not months. "I'm sure the Egyptians will press for a much shorter period," one source in Cairo said.
Other changes in the original Peres proposal either spell out what was implicit in his earlier understandings with the Egyptians or restate agreements that already exist between the two countries. One diplomatic source referred to them as "almost like throwaway lines."
However, Egypt will have to approve each change. If it balks at any of the 14 points, new wording will have to be submitted to the Israeli Cabinet for approval.
If Egypt formally agrees to the Israeli outline of a comprehensive settlement of their differences, the next step will be negotiations on the rules under which the Taba arbitration will proceed. At the same time, the two sides would negotiate terms of access and other arrangements for the side that loses the Taba arbitration.
Agreement on the so-called "terms of reference" of the Taba arbitration, the return of Egypt's ambassador to Tel Aviv and the process of normalization are to "commence simultaneously" under the Israeli government formula. Only then would the actual arbitration begin.
Could Be Finished in Weeks
Informed sources in Jerusalem said the two sides have already made considerable progress in negotiating the terms of reference and that it is conceivable that the whole procedure could be finished in two or three weeks from the beginning of talks.
Time staff writer Dan Fisher contributed to this article from Jerusalem.