Arafat Pledges to Clean Up PLO’s Books : Mideast: Pressured by the U.S. and Egypt, Palestinian leader says he will do what’s necessary to clear way for outside aid.

PLO Chairman Yasser Arafat, responding to blunt warnings from both the United States and Egypt, promised Saturday to straighten out the Palestine Liberation Organization’s chaotic financial management and complete long-delayed paperwork to clear the way for badly needed international aid.

In back-to-back meetings, Egyptian President Hosni Mubarak and Secretary of State Warren Christopher told Arafat that the fledgling Palestinian Authority in the Gaza Strip and the West Bank town of Jericho must act at once to convince international donors that aid money will be properly spent.

According to a senior U.S. official, Arafat pledged to sign a U.S. private investment agreement that has been delayed since June and to complete project specifications required by the World Bank, most of them pending for months. He also said the Palestinian Authority has begun collecting taxes after a slow start.

At the same time, Christopher said he has written to the world’s richest countries urging them to begin honoring more than $2 billion in pledges made last year to finance the experiment in Palestinian self-government.

“Time is of the essence,” Christopher said during a joint news conference with Mubarak. “It is important to have projects on the ground” to show restless Palestinians that last September’s peace agreement with Israel will pay off in improved living conditions.

Christopher visited Alexandria, Mubarak’s vacation home, at the start of a trip to the Middle East during which he hopes to narrow the differences between Israel and Syria in what remains the region’s most perplexing conflict.

During Christopher’s flight from Washington, a senior U.S. official said Syria and Israel are engaged in serious and substantive negotiations through a U.S. go-between. But he said that no final agreement will be possible until Jerusalem and Damascus resume face-to-face talks.

The United States and its allies have become increasingly impatient with the sloppy bookkeeping, inept fiscal management and cumbersome administration of the PLO-run government in Gaza and Jericho.

Christopher has often urged Arafat to get his house in order, without much effect.

This time, the Clinton Administration tried to double-team the PLO leader. At Washington’s suggestion, Mubarak invited Arafat to lunch before the Egyptian president’s meeting with Christopher. U.S. officials said Arafat was then invited to join the Mubarak-Christopher meeting because he had seemed cooperative in his talks with the Egyptian president.

The senior U.S. official said Mubarak talked very little during the three-way meeting but that “the chairman seems to be more responsive in making commitments when he is in the presence of President Mubarak.”

The official confirmed that Arafat did not bring any of the long-delayed documents with him but that “there were some very clear commitments.”

“The (World) Bank has a fair number of projects that are ready to put contracts out on, but they require final project design specifications from the Palestinians,” the official said. “That has not been finished, even though it was requested more than a month ago.”

He said the PLO has not yet signed an agreement with the U.S. Overseas Private Investment Corp.--a step required for U.S. private loans--although Washington submitted the plan in June. The official said Arafat promised to sign the agreement “immediately.”

The Palestinian Authority is desperate for cash to finance its police and other government operations. But the PLO has resisted demands for greater accountability.

“The hang-ups on the projects have a lot to do with documentation,” the U.S. official said. “The hang-ups on disbursement have a lot do with filing receipts.”

Following his meetings in Alexandria, Christopher flew to Israel, where he planned preliminary talks before heading for Damascus today to confer with Syrian President Hafez Assad. The Israel-Syria negotiations mark the most important phase of Christopher’s Mideast trip.