Arafat Urges Economic Tie With Israel

PLO leader Yasser Arafat, striving to soften Israel’s objections to creation of a Palestinian state, called in an interview made public Saturday for Israel, Jordan, Lebanon and the Palestinians to join in a peaceful economic union that could revive the economically troubled region.

Arafat said that creation of a pact similar to the Benelux agreement that links Belgium, the Netherlands and Luxembourg would clear the way for Japan, the Soviet Union, the European Community and the Organization of Petroleum Exporting Countries to join the United States in pumping in massive amounts of foreign aid.

Interviewed on the CBS-TV program “60 Minutes” for broadcast tonight, Arafat abandoned his often inflammatory rhetoric and spoke in conciliatory tones about Israel, even expressing respect for David Ben-Gurion, the first prime minister of the Jewish state.

Recalls Case of Egypt

When reminded that the Jerusalem government continues to brand the Palestine Liberation Organization a terrorist organization dedicated to the destruction of Israel, Arafat replied that Israel had denounced Egyptian President Anwar Sadat in similar terms before making peace with him at Camp David.

“They will continue to repeat the same (accusations against the PLO) until we’ll be able together--Palestinians and Israelis--to achieve real peace,” Arafat said.

“We are looking to have peace for our children and also for their children,” he said. “Otherwise, we have to blame ourselves and they have to blame themselves. . . . This is a historical chance. If we lose it, we are criminals.”

The interview, Arafat’s first on American television since the United States agreed late last year to begin a dialogue with the PLO, seems to be part of an escalating Palestinian public relations and diplomatic offensive. Israeli radio and television reported Saturday night that the PLO leader will travel to Cairo next week to confer with Soviet Foreign Minister Eduard A. Shevardnadze, who is visiting the Middle East.

Israeli officials announced that Foreign Minister Moshe Arens will also meet with Shevardnadze in Cairo.

In the interview, Arafat said that the PLO and the Israeli government are engaged in “indirect” negotiations concerning a possible cease-fire in southern Lebanon, where PLO guerrillas and Israeli troops have clashed recently. He declined to name the go-betweens and made clear that there have been no face-to-face talks.

Arafat said that the negotiations were initiated by Israel. He called them similar to the indirect talks that produced an Israeli-PLO cease-fire in 1981. At that time, U.S. presidential envoy Philip C. Habib served as intermediary.

Gives No Details

The PLO chief did not spell out the details of his economic union plan, but he said that it would include “joint ventures” and “international coordination to implement real peace in this area.” He said that such a union could draw economic aid from a variety of sources in addition to the $3 billion a year that the United States supplies to the area, almost all of it in military and economic assistance to Israel.

Arafat’s proposal seemed to parallel suggestions made by then-Secretary of State George P. Shultz in the closing days of the Reagan Administration: that Middle East peace might require finessing conventional concepts of sovereignty because the region is too small and economically interdependent to permit rigid frontiers.

Although he never issued it as a formal plan, Shultz envisioned an arrangement in which both Israelis and Palestinians would have rights in the West Bank and Gaza Strip territories now under Israeli military occupation, but neither group would have complete sovereignty.

There seems to be little chance that Israel will embrace Arafat’s proposal. But the PLO leader clearly hopes to stake out a moderate position that might appeal to the Bush Administration.

So far, President Bush has not tried to put his own stamp on Middle East diplomacy. U.S. officials have passed the word to Israel, Jordan, Egypt and other Middle East countries that the Administration is ready to consider new ideas from any quarter.

Israeli Prime Minister Yitzhak Shamir responded with an autonomy plan modeled closely on the Camp David model. Egypt and Jordan are believed to be working on proposals of their own.