Clinton Tells Israel TV He May Move Embassy From Tel Aviv to Jerusalem

President Clinton said in a strategically timed interview with Israeli television that he is considering moving the U.S. Embassy in Israel from Tel Aviv to Jerusalem, a course fraught with risky symbolism.

“I’ll make a decision sometime between now and the end of the year on that,” the president said in the interview.

With low-level contacts between Israel and the Palestinians set to resume as early as Sunday--less than a week after peace talks collapsed at Camp David, Md.--Clinton warned Palestinian Authority President Yasser Arafat against declaring an independent state, a step that the U.S. president equated with a “walk away from the peace process.”

And, seeking to bolster Israeli Prime Minister Ehud Barak, whom he has credited for showing courage in the talks, Clinton also said pointedly that the next time the leaders meet with him, “both sides have to be prepared to make the decisions necessary to conclude an agreement.”

“We are working aggressively to get these talks back on track,” the president said Friday during a brief question-and-answer session with reporters in Rhode Island.

The interview with Israeli television was recorded Thursday evening in the White House Roosevelt Room. A transcript was made public by the White House on Friday as Clinton began a day of political fund-raising stops in Rhode Island and the Boston area.

Just as the future of Jerusalem was at the core of the Camp David talks, and proved the most intractable issue, the future of the U.S. Embassy in Israel has been a point of contention since Israeli forces took control of East Jerusalem during the 1967 Middle East War with its Arab neighbors. Even as they said they favored such a move, successive American administrations have avoided moving the embassy to Jerusalem out of concern that the relocation would preclude a negotiated settlement governing the future of a city that is considered holy by Jews, Christians and Muslims.

Senate Majority Leader Trent Lott (R-Miss.) said this week that he would welcome an effort to move the embassy. In 1995, Congress passed a law by a wide margin mandating that the embassy move by mid-1999. But lawmakers gave the president the power to postpone the transfer for national security reasons--and Clinton exercised that power.

The president’s comments in the 30-minute interview were his most extensive public remarks on the talks since they broke apart Tuesday morning and Arafat and Barak returned to the Middle East. The remarks also presented the most explicit statement of U.S. intention to relocate the embassy to Jerusalem.

Clinton refused, however, to be specific about the decision, either in the interview or in the brief encounter with reporters Friday.

Asked in the interview whether he would consider the embassy’s relocation in any circumstance, even if an agreement between Palestinians and Israelis remains elusive, Clinton said:

“I think I should stand on the words I said. I have always wanted to do it. I’ve always thought it was the right thing to do. But I didn’t want to do anything to undermine the peace process--our ability to be an honest broker, which requires that we be accepted by both sides.

“But it’s something that I have taken under review now because of the recent events,” he added.

With Barak facing sharp divisions at home, Clinton sought in the interview to strengthen the prime minister’s hand with his domestic constituency and to call on the Arabs to begin a process of digesting the changes required to make peace.

Indeed, as he has on several occasions since the talks fell apart, the president seemed to go out of his way to praise Barak: Clinton acknowledged that the Palestinians took steps that have never been made before, but he also noted that the prime minister “was more creative and more courageous.”

Such remarks, though, do not necessarily set back Arafat, who is facing pressure from within the Palestinian community to stand, unyielding, in opposition to unrestricted Israeli authority over Jerusalem.

“When you’re dealing with something as involved as Jerusalem in these peace talks, the only person who’s going to get cheered is the person that says, ‘No, no, no.’ And that’s an easy sell. You go out and say ‘No,’ and you can get up the crowd and they’ll cheer you. But if that is the attitude which prevails, then we won’t get peace,” Clinton said.

In the Middle East, Hanan Mikhail-Ashrawi, a Palestinian spokeswoman, was quoted by the Agence France-Presse as describing Clinton’s comments as “blatant political blackmail.”

“It is a very cynical pandering to Barak and Clinton’s domestic needs” that “exposes the underlying American bias and undermines the peace process,” she said.

With the future of the talks unsettled at best, Arafat has given no indication that he is moving away from his stated plan to declare Palestinian statehood.

Clinton said that if such a unilateral declaration is made, “our entire relationship” with the Palestinian Authority “will be reviewed, not confined to that.”

“It would be a big mistake to take a unilateral action and walk away from the peace process,” he said. “And if it happens, there will inevitably be consequences--not just here but throughout the world, and things will happen.”

A proposal in Congress, supported by First Lady Hillary Rodham Clinton in her Senate campaign in New York, would deny aid to the Palestinians if they took such a step. The president said he had not reviewed the proposal and would not comment on it.

The president, who has tried to use personal chemistry to bring disparate parties together throughout his tenure, was asked how Barak and Arafat could “resist the Clinton charm.”

“I’m afraid my charm and my reasoning abilities, at least for just 15 days, cannot compare with the thousands of years of history that go to the core of the identity of Israelis and Palestinians, as regards Jerusalem,” he said, adding:

“Believe me, if I could have prevailed by charming, cajoling, arguing or just depriving them of sleep, we would have a deal.”

As it is, Clinton said, if an agreement is not completed by the time his term ends Jan. 20--and he insisted that the challenge can be met--”the negotiating teams for the two sides, and the attitudes of the people, will be in a different place than they were” as a result of events in the past seven years, and particularly as a result of progress made at Camp David.

Clinton stopped in Barrington, R.I., where he helped raise between $400,000 to $450,000 for Rep. Patrick J. Kennedy’s reelection campaign.

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Times staff writer Robin Wright in Washington contributed to this report.