Israel to Offer Broad Concessions to Arabs : Mideast: Rabin gets Cabinet OK to give Palestinians control of education, health care, law enforcement.

Prime Minister Yitzhak Rabin pledged Sunday that Israel will make its most forthcoming offer yet to Palestinians on self-government and autonomy in a major initiative to accelerate Arab-Israeli peace talks.

Rabin won approval from his Cabinet for giving the Palestinians full and immediate administration in such functions as education, health care and law enforcement and then negotiating terms for their control of land and water resources, according to official accounts of the weekly Cabinet meeting.

Israel, Rabin said, also accepted the Palestinians’ need as the basis for political autonomy for broad legislative powers and the authority to collect their own taxes and manage directly the economy of the West Bank and Gaza Strip.

Although Israeli officials gave no further details of the initiative, Energy Minister Amnon Rubinstein of the dovish Meretz party emerged from the lengthy Cabinet meeting optimistic about prospects for the talks, which resumed last Tuesday after a four-month suspension.

“For the first time, we are beginning to talk about talking business,” Rubinstein said after Rabin’s briefing on the negotiations. “Certainly, this round of negotiations is much more down to earth, much more pragmatic than the previous ones, which resulted in a lot of words and no business.”

Israeli officials are particularly pleased with the agreement last week with the Palestinian delegation to the Washington talks to form three working groups--on land and water resources, human rights and autonomy--and see the negotiations as moving ahead after their four-month suspension.

Palestinian negotiators are also unusually upbeat. “We are seeking broad indications that things are different,” Hanan Ashrawi, the Palestinian spokeswoman, told reporters in Washington on Friday. “We have room to expect progress.”

The Israeli Cabinet, however, also decided to continue the closure of the West Bank and Gaza Strip, agreeing to increase the number of Palestinians allowed to work in Israel to 33,000, about a quarter of those who previously worked here.

Only Palestinians over 25 years old, married and with children will be permitted under the Cabinet decision, and they will be restricted to approved jobs, largely in agriculture and construction.

But the Cabinet approved Rabin’s initiative in the negotiations with the Palestinians, according to Israeli officials. Rabin argued that increased Israeli flexibility and a series of conciliatory moves, including the return of 30 prominent political exiles and the reunification of several thousand families, would keep the Palestinians in the talks and strengthen the delegation against criticism that the negotiations had been fruitless.

According to the influential newspaper Haaretz, Israel is now proposing to give the Palestinians control over 60% of the West Bank and virtually all the Gaza Strip, preserving what it regards as the minimum necessary for its security needs and for the Israeli settlements in the regions.

Foreign Minister Shimon Peres called again at the Cabinet meeting for early elections on the West Bank and Gaza Strip, both to form a Palestinian government ready to accept the authority Israel would be giving up and to constitute a negotiating team able to make the hard decisions that lie ahead.

But other ministers reportedly warned that elections now would likely bring violence among rival Palestinian political groups and argued that the Palestinians themselves had not demanded them for this reason.

Yossi Sarid, another Meretz minister, again urged Israel to talk directly with the Palestine Liberation Organization to speed the negotiations and ensure their success.

In a compromise proposal, however, Sarid urged the government to announce its readiness to meet with any group that has promoted the peaceful resolution of the conflict when a second stage of negotiations begins, after three years of autonomy, for what the Palestinians hope will be full independence.

In a move toward both elections and getting around the impasse over the future of Jerusalem, Israel has accepted a U.S. suggestion that Palestinian residents of the city be allowed to vote in the election, Haaretz reported, but they would be able to stand for election only from other towns.

Under this compromise, the city’s status--both Israel and the Palestinians want it for their capital--would not be resolved until the second stage of negotiations, according to Haaretz.

Jerusalem is a sensitive issue for both Israel and the Palestinians. Israel claims the entire city as its “eternal capital.” But Palestinians consider East Jerusalem to be occupied territory and want it as the capital for an independent Palestinian state.

Haaretz reported that Israel also agreed to international supervision of elections in the occupied territories. In the past, Israel insisted that its own security forces oversee the ballot boxes.

The United States, meanwhile, was reported to be putting together a large aid package of about $1.25 billion for the West Bank and Gaza Strip to underwrite an agreement on autonomy--with an immediate $24 million from Washington.

Abdel-Wahad Darawshe, leader of the Arab Democratic Party in the Knesset, the Israeli Parliament, said that Clinton Administration officials told him that the assistance program, financed by the United States, the European Community, Saudi Arabia and other oil-rich Arab states, would be outlined this week at multilateral negotiations on economic development in the region.

In the negotiations with Syria, Israel also appeared to be softening its stand. Police Minister Moshe Shahal called at the Cabinet meeting for recognition of Syrian sovereignty over the Golan Heights, a region that Israel annexed more than a decade ago, as part of a peace agreement with Damascus.

“If there will be a need to choose between the Golan Heights, and true and stable peace, peace should be chosen,” Shahal was quoted as telling the rest of the Cabinet.