Israel May Cede Larger Areas

During an intense round of diplomacy Friday, Secretary of State Colin L. Powell worked on final details of an agreement between Israel and the Palestinians to hand over control of the entire Gaza Strip and the West Bank city of Bethlehem to the new Palestinian government, according to U.S., Israeli and Palestinian sources.

The deal would more than quadruple the area of Israel’s withdrawal as a first step in implementing the U.S.-orchestrated “road map” to peace. The area initially under discussion focused on only a small northern sector of Gaza and did not include Bethlehem.

Although serious problems remain, the withdrawal could also be the cornerstone of a wider peace package, including a cease-fire by the Palestinian group Hamas and an end to Israel’s assassinations of suspected militants, senior Palestinian government officials said in interviews.

Israeli officials expressed cautious optimism, although all parties to the negotiations emphasized that violence often overtakes diplomacy and derails Middle East peace efforts. “This could work,” said a senior Israeli diplomat.

Under a potential deal, the government of Palestinian Authority Prime Minister Mahmoud Abbas would be given a “grace period” of more than one week, during which Israel would not take military action in response to any renewed violence originating in the Gaza Strip, the Israeli diplomat said.

“The idea is to give them a chance,” he said.

A U.S. team of CIA and State Department officials, led by new special envoy John Wolf, would monitor the Israeli withdrawal and a Hamas cease-fire, the Palestinian sources said.

The potential breakthrough in implementing the peace plan has emerged in large part because of steady behind-the-scenes U.S. intervention, according to U.S. and Palestinian officials.

In recent days, the Bush administration has informed the Palestinian Authority that it must ensure an end to violence by militant groups either by persuading them to halt their attacks or by cracking down on them.

The Palestinians, who have been engrossed simultaneously in mediation with Israel and with Hamas, say that the Islamic militants linked to dozens of suicide bombings are now prepared to enact a cease-fire to coincide with an Israeli withdrawal from Gaza and a pledge to end the assassinations.

After talks with Powell on Friday, Abbas said the extremist groups would end attacks because of “utmost concern” about the situation of the Palestinian people. “They are interested in reaching solutions for them. I have felt the desire of these people, the willingness of these people to reach political solutions. So I am confident, highly confident, that we will reach an agreement with all these organizations,” Abbas said at a news conference with Powell.

If Abbas’ government can take control, there will be “fundamental changes in the way Israel conducts military operations,” according to the Israeli diplomat.

The major remaining obstacle in negotiations between the two sides centers on who would control the main road that separates northern and southern Gaza, the U.S., Israeli and Palestinian sources said.

Israel wants to keep two checkpoints on Salahuddin Road to protect Jewish settlers who live nearby, they say. The Palestinians insist that total control of Gaza’s main artery and free movement on it are essential to revive economic life, which has virtually collapsed during the 33-month Palestinian uprising and subsequent Israeli reoccupation and military strikes.

To ensure security, the Palestinians have agreed to joint patrols, inspections and close security coordination with the Israelis as well as cameras to monitor the road, but they are balking at any Israeli deployment of tanks or troops after a withdrawal, the Palestinian sources said.

Israel has proposed the construction of a bypass road on land that is now part of a Palestinian refugee camp, but the Palestinians are refusing because it would mean destroying hundreds of homes, the Palestinians said.

Negotiations are set to resume Sunday, after the Jewish Sabbath.

An agreement could come as early as Monday, Palestinian Authority Foreign Minister Nabil Shaath predicted in an interview. “A week ago we were talking only about the return of the northeast corner of Gaza and no Israeli commitment to stop assassinations. We are today talking about full steps to end violence on all sides, U.S. monitoring and Palestinian control of Gaza and the holy city of Bethlehem. This is a sea change,” Shaath said.

He conceded, however, that there are still hazards. “You never know. There could be problems at the last minute. But we hope and think this can be resolved quickly. We are very encouraged,” he added.

Powell said an agreement on Gaza and Bethlehem would be a “very, very powerful” boost for peace efforts.

“If we can do that and the people of Gaza can see life return to the strip and their own authority in charge, then I think it would give them confidence that organizations such as Hamas and other terrorist organizations perhaps do not have the right answer and that the right answer is the road map and moving forward toward peace,” Powell said at the joint news conference.

U.S. officials are also cautiously optimistic about the ability of the Abbas government, which is less than 2 months old, to end rocket attacks against Israel from the Gaza Strip. Unlike the West Bank, where the Palestinian security apparatus has been largely destroyed, in Gaza the Palestinians have the manpower and capability to assume control of the densely populated area and crack down on individuals or groups that violate a cease-fire, said a senior State Department official traveling with Powell.

But two weeks after President Bush’s summit with Israeli and Palestinian leaders in Aqaba, Jordan, Powell also asked both sides to act “urgently” to translate principles into tangible actions.

“We have to move with great speed and deliberateness. It has been only two weeks since the Aqaba summit, but we don’t want time to pass without action taking place,” Powell said. “We don’t want terrorists to win.”

Washington is pressing for both sides to take confidence-building steps to launch the first of the three stages in the peace initiative designed to create a Palestinian state and a peace settlement by the end of 2005.

Short of a deal, however, the situation on the ground remains highly volatile. As Powell conferred with Israeli Prime Minister Ariel Sharon, an American-born Jewish settler was killed in a shooting near the Jewish settlement of Ofra in the West Bank. Hamas claimed responsibility for the attack that killed Tzvi Goldstein, 47, and seriously injured his parents.

Goldstein’s wife, Michal, also a U.S. citizen, was slightly injured when their car flipped into a ditch after the shooting. Relatives said the family had gone to a celebration in Jerusalem following the wedding of Goldstein’s son.

In the Gaza Strip, a 25-year-old Palestinian militant was killed in a clash with the Israeli army as he prepared to attack the settlement of Neve Dekalim, Associated Press reported.

After his talks with Powell, Sharon warned that Israel would continue preemptive strikes without an agreement. “We have proposed to the Palestinian Authority to assume responsibility as fast as possible for those areas where they will be able to make sure that there will be peace and security,” Sharon told a joint news conference. “Until that time we will, of course, continue our operations.”

Political rhetoric also remains a fixture of public statements. Sharon said Friday that Hamas must be totally dismantled, implying that a cease-fire would not be enough.

“The Palestinian Authority must fight terrorist organizations. It must disarm them. It must make sure that their infrastructure no longer exists,” he told reporters. “So long as there is terror, there will be no political process.... We have to make sure that they do not exist anymore.”

Powell used similar language, calling Hamas the “enemy of peace” and a “problem we have to deal with in its entirety.”

Hamas spokesman Abdulaziz Rantisi responded angrily, calling Powell a “little slave -- to his master Sharon” and “the real enemy of peace and justice.”

At the same time, however, U.S., Israeli and Palestinian officials confirmed that additional mediation will continue over the next several days.

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Times staff writer Laura King in Jerusalem contributed to this report.