Progress Reported--but Still No Mideast Pact : Negotiations: Israelis, Palestinians continue to disagree on fate of Hebron in West Bank. Washington hopes for signing this week.

Israeli Foreign Minister Shimon Peres and PLO Chairman Yasser Arafat made progress on the critical issue of security arrangements for the West Bank city of Hebron in negotiations Sunday and early today, but they failed to complete a much-delayed agreement extending Palestinian self-rule throughout the West Bank.

U.S. Middle East peace envoy Dennis Ross phoned both sides from Washington throughout the night, urging them to compromise on the key issue blocking agreement on the expansion of self-rule. The Clinton Administration is still hoping the President will be able to host a signing ceremony by week’s end.

Peres arrived at this Egyptian seaside resort Saturday night and met--with only brief breaks--until past 4 a.m. today with Arafat.

The two shared sandwiches at the negotiating table Sunday night and met with teams of experts who pored over maps of Hebron and argued over how many Israeli soldiers will withdraw from which of the city’s neighborhoods before Palestinian elections are held. Arafat adviser Nabil abu Rudaineh described the atmosphere as “serious and civilized.”

The Palestine Liberation Organization leader left at 6 a.m. to meet Japanese Prime Minister Tomiichi Murayama in the Gaza Strip and was scheduled to return to Taba for more talks with Peres this afternoon.

Murayama arrived in Israel late Saturday on the first trip to the country by a Japanese leader.

Sunday morning, Palestinian negotiators angrily accused Israel of seeking to permanently divide Hebron into a mixed Jewish-Arab city. But by the time Peres left for his hotel in nearby Eilat, Israel, this morning, the Palestinians and Israelis agreed that they had made progress on Hebron and had all but resolved some other issues.

Arafat brought Hebron Mayor Mustafa Natshe and other Hebron officials to the negotiating table with him. Natshe has said that Hebronites will boycott Palestinian elections unless Israeli troops substantially withdraw from the town, as they are scheduled to withdraw from other Palestinian towns in the West Bank within 100 days of the agreement’s being signed.

The Palestinians are willing to recognize an Israeli right to protect Jewish settlers living in the heart of Hebron, but they want a sharp reduction both in the number of Israeli army troops patrolling the city and in the size of the area the military controls. They want to jointly provide security with the Israelis for the more than 400 Jewish settlers in Hebron.

Hebron is “a microcosm of all the problems in the West Bank,” Israeli negotiator Uri Savir said Saturday. The town is a stronghold of the militant Islamic movement Hamas.

The settlers, who say they are determined to rebuild Hebron’s ancient Jewish community, live among 120,000 Palestinians. The communities uneasily share the Cave of the Patriarchs, a religious shrine where both Muslims and Jews believe their joint patriarch, Abraham, is buried.

In February, 1994, Baruch Goldstein, a Jewish settler from the nearby Kiryat Arba settlement, shot about 30 Muslim worshipers to death as they prayed in the mosque housed in the Cave of the Patriarchs. Since the massacre, Israel has kept more than 1,000 troops deployed in the city and established a series of checkpoints, roadblocks and no-trespassing areas for the Palestinian residents in an effort to forestall further violence.

Palestinians say the Israeli measures have wrecked the city’s economy and made normal life impossible. The settlers say their lives will be at risk if the army pulls out of any part of Hebron or allows Palestinian police to patrol there.

Fearful for the safety of the settlers, Israel is determined to retain overall responsibility for security in the city even after it pulls out of other West Bank cities and villages.

Palestinians say that anything short of an Israeli pullout from most of Hebron would violate both the spirit and the letter of the Declaration of Principles that Israel and the PLO signed Sept. 13, 1993. In that agreement, Israel said it would withdraw its troops from Palestinian population centers in the West Bank prior to Palestinian elections there.

Israel’s West Bank redeployment was supposed to begin more than a year ago, but a series of suicide bombings by Muslim militants heightened security concerns and slowed the negotiations to a crawl.

Now, both sides seem eager to finish their talks and move on to redeployment and the holding of Palestinian elections.

On Saturday night, Peres brought proposals to thin the number of Israeli troops in Hebron; to allow unarmed Palestinian police to patrol many areas of the city, and to ease restrictions on daily life for Hebronites. On Sunday, Peres told reporters that he believed this round of negotiations would be decisive.

Teams of negotiators worked through the day Sunday on other outstanding disputes--such as who will control the West Bank’s electrical grid and how many Palestinian prisoners in Israel will be released after an agreement is signed.

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