Hezbollah Denies It Seeks Swap : Statement Dims Hopes for Hostage Deal With Israel

The fundamentalist Hezbollah movement denied Saturday having any part in tentative feelers for a prisoner exchange with Israel, throwing a chill on faint prospects that the foreign hostages in Lebanon might be part of a deal.

In a message directed pointedly at Jerusalem, the statement again disavowed any Hezbollah connection with the hostages or their Muslim extremist kidnapers and said that Israel’s abduction of Shiite clergyman Sheik Abdel Karim Obeid “has ended all possibilities for an exchange.”

“The Zionist entity (Israel) has to understand that it has made a mistake,” said the statement delivered to a Western news agency in Beirut. It specifically ruled out the release of three Israeli soldiers held captive in Lebanon. It did, however, specify five Palestinians whom Hezbollah wants the Israelis to free, along with Obeid and other Lebanese Shiites, without suggesting a trade in return.

Rejection Reaffirmed

Hezbollah had rejected an offer made Monday by the Israeli government to exchange Obeid, two men kidnaped with him on July 28 and other Shiite prisoners in Israeli hands for the three Israeli soldiers and the foreign hostages, including eight Americans. Saturday’s statement reaffirmed that rejection.

Initial Israeli reaction was extremely guarded. “This is a war of nerves,” Eitan Haber, spokesman for Defense Minister Yitzhak Rabin, told The Times in Jerusalem.

The message from Hezbollah (Party of God) appeared designed to deal the group out of any prospective negotiations on the hostages, at least publicly.

“We affirm that Hezbollah has no direct or indirect links with the hostage issue and with negotiations concerning it,” the message said. “The matter concerns only the kidnapers. Everyone knows that and knows how to get to them.”

Feverish Activity in Beirut

However, in two days of feverish activity in Beirut since the threatened execution of American hostage Joseph J. Cicippio was suspended Thursday night, diplomats kept knocking at Hezbollah’s door. On Friday, U.N. Undersecretary Marrack Goulding and Algerian officials met with Hezbollah’s spiritual leader, Sheik Mohammed Hussein Fadlallah, in efforts to seek a resolution of the crisis that has mounted steadily since last Monday, when another American hostage, Marine Lt. Col. William R. Higgins, was reported hanged by his radical Shiite captors.

Confirmation of these contacts in Beirut came first in a midnight broadcast on Algerian state radio, followed by published reports on the comments of Khaled Hasnawi, Algeria’s ambassador to Lebanon.

Hasnawi, the radio reported, had taken part in a series of talks involving all hostages held in Lebanon, whether “Lebanese, Palestinians, Americans, Europeans or Israelis.” The Algerian envoy met with both Goulding and Fadlallah, whose fundamentalist organization, according to intelligence reports, maintains ties to the clandestine groups believed to be holding the foreign hostages. Reports from Beirut said that Red Cross representatives were also involved in the round of contacts.

Without further elaboration, the broadcast said: “Progress in this mediation was accomplished Friday.”

Coincided With Iran Comments

The activity in Beirut coincided with the declaration in Tehran by Iranian President Hashemi Rafsanjani that his government was prepared to play a role in resolving the hostage crisis. “I tell the White House, the problem of Lebanon has solutions,” the newly inaugurated Iranian leader said at Friday prayers. “The freeing of hostages has solutions, reasonable, prudent solutions.”

In Washington, a cautious President Bush, commenting on Rafsanjani’s remarks, said: “I’m encouraged, but I don’t want to get the hopes of the hostages’ loved ones up once again to have those hopes dashed. This is a brutal process.”

In suspending the threatened execution of Cicippio, the Revolutionary Justice Organization declared it was acting out of “respect of the intervention by some states and sides that were asked by the United States to mediate.” Iran, along with Syria, the Soviet Union, Algeria and a number of other countries, was on the list contacted by Washington officials in their efforts to spare Cicippio’s life.

In related developments Saturday:

-- Goulding arrived in Damascus, the capital of Syria, which holds military sway over two-thirds of Lebanon with an army estimated at 40,000 troops. “I came here to explore what the United Nations might be able to do to help promote a final solution to the hostage crisis,” he told reporters.

An aide said the U.N. official plans to meet today with Syrian Foreign Minister Farouk Shareh and the visiting Salim Hoss, who heads a Sunni Muslim Cabinet in West Beirut, a rival government to the Christian Cabinet led by Maj. Gen. Michel Aoun in East Beirut. Goulding met earlier with Aoun in the Lebanese capital.

“There does seem to be a widespread feeling that this hostage problem has got to be tackled fundamentally and this is the time to do it,” Goulding said.

Goulding’s original mission to Lebanon was to determine the fate of Higgins, who was serving with a U.N. observer force there when he was kidnaped in February, 1988.

-- The Iranian government said it had refused to receive a note sent earlier in the week from Washington authorities, according to the official Iranian news agency. The report did not disclose the contents of the note, other than saying that it was related to events in Lebanon, but it claimed the message concerned matters “that had nothing to do with Iran.”

-- Father Khalil Abi Nader, a Maronite Christian priest dispatched by Pope John Paul II, called on Hezbollah leader Fadlallah as part of a mission to investigate the reported execution of Higgins. Bush had asked the Pope for Vatican help in the hostage crisis.

Hopes for movement on the crisis were raised Friday when Rafsanjani declared Iran’s willingness to help resolve the issues, combining the offer with a warning to Washington that its naval deployments in the region, which include the dispatch of the carrier America to the Arabian Sea off the Iranian coast, is aggravating the situation. Asked about Iran’s role in resolving the crisis, a Nicosia-based ambassador of one of the countries directly involved told The Times: “I think he (Rafsanjani) is trying. I think he wants to be more flexible and more moderate.”

Focus on Algerians

On Saturday, the focus turned to the Algerians, who were quietly but principally instrumental in the 1981 release of the 52 U.S. Embassy hostages held captive in Iran for 444 days. Ambassador Hasnawi, according to press reports published Saturday, told reporters Friday in Beirut that “the hostage issue has started to unfold.”

Hasnawi said his government has established a team of Algerian political officials and intelligence agents in the Lebanese capital “to contact the parties which hold the hostages . . . all the hostages, especially the Americans.” He said that Bush had asked Algerian President Chadli Bendjedid to intercede.

The claimed execution of Higgins and the death sentence against Cicippio, the kidnapers said, were both designed to force the Israeli government to free Obeid.

‘Great Efforts’ Cited

Hasnawi said that he had met personally with Fadlallah and members of the organization’s ruling council, and credited the sheik with “great efforts” to help forestall the execution of Cicippio.

“Following contacts begun (Thursday) with Hezbollah, in the form of pleading and entreaties, and after we strongly condemned the abduction of Sheik Obeid, we counseled patience and self-restraint and called for absention from dramatic measures and decisions,” the Algerian envoy said.

Had Cicippio been killed, he told reporters, “It would have led to a dangerous reaction. America or Israel would have intervened militarily without anyone knowing the full scope or nature of such an intervention.” The result, he said, would have been a “major explosion.”

The Arab diplomat claimed that frantic diplomatic activity had succeeded in “cooling off” the situation but warned that a binding solution would require a broader approach: “We should distance ourselves from bargaining tactics--a hostage for a hostage, a hostage for sums of money. We should cure the causes for hostage taking: the Palestinian question, Israeli kidnapings, attacks against Lebanon.”

Heavy Pressure on Syria

Meanwhile, the hostage crisis drew Syria into the diplomatic picture. It was not clear what role the Damascus government might have played in easing tensions, but the White House put heavy pressure on Syrian President Hafez Assad to help find a solution.

Friday’s editions of As Safir, a pro-Syrian Lebanese newspaper, suggested that the crisis may have a spillover effect on U.S.-Syrian relations concerning the long-running Lebanese civil war. Cicippio’s reprieve, the newspaper reported, “has flung the doors wide open to an American-Syrian dialogue on Lebanon.”

Late Friday night and Saturday, the big guns opened up again in Beirut after four days of relative quiet. Seven hours of exchanges between Syrian and Christian artillerymen killed 21 and wounded more than 80, police reports said. Thirteen people were killed when a Syrian heavy mortar round landed on a shelter in the Christian sector.

PLAYERS IN CRISIS Here are some of the new developments in the hostage situation: ALGERIA This North African country is now a key player in trying to defuse the situation. Khaled Hasnawi, the ambassador to Lebanon, held a series of talks involving all the hostages. Official Algiers Radio said, “Progress in this mediation was accomplished.” Hasnawi met with several people, including U.N. Undersecretary Marrack Goulding and Hezbollah’s spiritual leader, Sheik Mohammed Hussein Fadlallah.

ISRAEL Repeated its offer to swap prisoners with Shiite extremists after receiving a statement from Hezbollah demanding freedom for five Palestinians, in addition to Sheik Abdel Karim Obeid and his two associates.

IRAN The government said it refused to receive a note from the United States on “events in Lebanon.” The official Islamic Republic News Agency quoted an unnamed Foreign Ministry official as saying the message was delivered through a third country and “since the content had nothing to do with Iran, the message was not accepted.”

LEBANON Pro-Iranian Muslims paraded in the Shiite slums of south Beirut to denounce the United States. At weekly prayers before the demonstration, Hezbollah spiritual leader Fadlallah urged those holding the hostages not to harm them. “Let’s be better than they,” he said, referring to the West. “Let’s be loftier. Let’s be more humanitarian.”

UNITED NATIONS Undersecretary Goulding, after meeting with Fadlallah and Algerian officials, arrived in Damascus, Syria, which holds military sway over two-thirds of Lebanon with an army estimated at 40,000 troops. “I came here to explore what the United Nations might be able to do to help promote a final solution to the hostage crisis,” he told reporters. He planned to meet with Syrian Foreign Minister Farouk Shareh, among others.