Israel Welcomes U.S. Move, While PLO Is Likely to Call for Sanctions

Israel’s government greeted the break between the United States and the Palestine Liberation Organization with satisfaction, while nationalist Palestinian spokesmen warned that peace efforts had reached a dead end.

The PLO executive committee convened in Baghdad, Iraq, late Wednesday to consider the U.S. decision, and in Tunis, PLO Chairman Yasser Arafat’s chief spokesman said the organization will have no official comment until the committee completes its deliberations.

But PLO information department chief Jamil Hilal, calling President Bush’s decision “a blow to the peace process . . . that is likely to encourage more warmongering,” said the PLO is likely to seek economic and diplomatic sanctions in the Arab world against the United States as a result of the decision.

“I think the Arab states have to stand up and say this is an uneven-handed policy . . . and some form of clear action, especially an economic boycott or withdrawal of Arab ambassadors from the United States, would seem to be the appropriate response.”

Avi Pazner, a spokesman for Prime Minister Yitzhak Shamir, said: “We believe that the decision of President Bush to suspend the dialogue with the PLO is an important and positive decision as far as the peace process in our area is concerned. We have always maintained that the PLO is an organization that indulges in terror.”

Since the talks with the PLO began 18 months ago, Shamir has lobbied Washington to break off the dialogue.

The Bush contacts undermined Israel’s refusal to talk with its longtime enemy. Shamir argued that the U.S.-PLO contacts discouraged other Palestinians from taking up his offer to elect a peace panel in the Israeli-occupied West Bank and Gaza Strip.

“Of course, now it will be easier to talk to Palestinians in Judea, Samaria and Gaza because the PLO can no longer be considered by them a major interlocutor,” said Pazner, using biblical names for the occupied lands that, in the government’s view, signify that the territories belong to Israel.

Pazner declined to specify with whom Israel would talk about elections, if not the PLO. Shamir has refused an invitation from Secretary of State James A. Baker III to open talks with a Palestinian delegation in which the PLO would have indirect representation.

Palestinian analysts in the West Bank and Gaza complained that Bush’s move undermines the slim chances of getting peace talks off the ground.

“Who will talk for the Palestinians if not the PLO?” asked Mahdi Abdel Hadi, who heads a Palestinian think tank in Jerusalem. “Bush has decided to go with Shamir and see what can be produced. This is a gift to Shamir, who has never wanted to talk.”

Pazner, the Israeli spokesman, said Shamir will send a letter to Bush in the coming days outlining steps to peace. Earlier in the week, Bush sent a letter to Shamir asking him how he will proceed.

Aides to the Israeli prime minister have suggested that Shamir plans to sidestep the Palestinian issue by emphasizing the need to talk peace with hostile Arab governments. On Tuesday, Shamir invited Syrian President Hafez Assad to Israel for “unconditional” negotiations. On Wednesday, a Syrian diplomat in Tunisia termed the call a publicity stunt.

There were warnings Wednesday that frustration over failed diplomacy will lead to increased violence among West Bank and Gaza Strip Palestinians who have been battling Israeli rule.

Hilal, affiliated with the more radical Democratic Front for the Liberation of Palestine faction of the PLO, said the decision to suspend the dialogue is likely to cause an escalation of the violence.

“I think people in the occupied territories will see this as a sign that more intensification of the intifada is necessary,” Hilal said.

The League of Arab States said Bush’s decision signals “a penalty to Arab moderation, especially Palestinian moderation, and rewards Israeli intransigence.”

Moderate leaders in the occupied territories, headed by Faisal Husseini, had been working on two tracks to justify their policy of urging Palestinian restraint--persuading the Israeli public to support talks and bringing American pressure to bear on Israel. In the past month, the strategy has suffered a double-barrel blow.

First, Shamir pieced together a new government committed to keeping all the occupied lands. Second, Bush, by breaking off talks with the PLO, has made it easier for Israel to reject the PLO. Palestinian sources said that privately, local leaders had hoped that the PLO would somehow satisfy Washington’s demand to condemn the beach raid.

“Now, no one can see a way out,” said Daoud Kutab, a nationalist journalist.

Williams reported from Jerusalem and Murphy from Cairo.