Negotiators working on deal to end Bethlehem siege

Negotiators struggled yesterday to hammer out the final details of a deal to end an armed standoff at a Bethlehem shrine as Israel`s prime minister geared up for a diplomatic assault on Yasser Arafat in Washington.

US Secretary of State Colin Powell said Palestinians and Israelis were close to an agreement that would lift Israel`s five-week siege at the Church of the Nativity, built on the spot Christians revere as the birthplace of Christ.

But a spokesman for the Catholic Church`s Franciscan order said he had been told the talks had stalled.

Sources close to the negotiations said the two sides remained at odds over how many of the dozens of Palestinian gunmen holed up inside the church would be sent into exile abroad and how many would be transferred to the Gaza Strip.

"We`re getting tired of hearing it`s going to finish in a few hours or a few days. The hunger and waiting are making it very difficult," said Bethlehem Governor Mohammed al-Madani, who has remained inside the church during the siege.

The deal would end the last major standoff of Israel`s West Bank military offensive, which it launched on March 29 after Palestinian suicide attacks killed dozens of Israelis.

It would also pave the way for troops to leave Bethlehem, the last major city or town still occupied after the offensive, as Israeli Prime Minister Sharon prepares to meet US President George W. Bush in Washington today.

Bush has demanded a full withdrawal from Palestinian-ruled areas, an Arab condition for attending a peace conference world powers want held this summer on 19 months of violence since the Palestinians rose up against Israeli occupation.

Sharon, seeking to freeze Arafat out of peace efforts, flew to Washington armed with a 100-page report which Israel says shows the Palestinian leader used millions of dollars in the US and European Union donations to finance attacks on Israelis.

The Palestinian Authority calls the documents forgeries. Sharon was due to hold talks with Powell and US Defence Secretary Donald Rumsfeld yesterday and see Bush today at the White House for the fifth time since he took office.

In a sign that Israeli-Palestinian tensions remain high, troops shot dead four armed Palestinians overnight during attempts to infiltrate Israel, an army spokesman said.

A dozen Israeli tanks and armoured vehicles raided a Palestinian-ruled area in the divided West Bank city of Hebron, witnesses said. "The troops arrested two wanted terrorists and left the area," an Israeli military source said.

Palestinian gunmen were among 200 people who originally took cover in the Bethlehem church on April 2 when Israeli troops swept for militants during their crushing West Bank campaign.

The sources said the two sides had agreed 39 Palestinians wanted by Israel should be sent out of the West Bank but not on how many should go abroad, and how many should go to Gaza.

One source said Israel wanted as many as 15 militants to be sent abroad. He said that number was unacceptable to the Palestinians, who were awaiting instructions from Arafat at his headquarters in the West Bank city of Ramallah.

Madani said the proposed plan called for wanted men to go to Italy through Jordan as "guests of the Italian government", Madani said. He said the Palestinians wanted only about four to seven of the wanted men exiled abroad.

"They are at a stalemate," Father David Jaeger, spokesman for Franciscan custodians of the Holy Land sites, told Reuters in Rome.

But he added: "The talks aren`t over. As of this moment we have no information that it is really over yet."

Earlier, Colonel Oliver Rafowicz, an Israeli army spokesman, told a news conference in Bethlehem: "We`re expecting an agreement soon. Soon could be today, tomorrow or the next day."

In Washington, Powell told reporters a deal was near though he declined to predict when it would be finalised. "We need one or two little problems solved," he said.

An Israeli siege of Arafat`s headquarters was resolved last week when six men wanted by Israel were transferred to a jail in the West Bank under US and British supervision.

In Bethlehem, scores of militants, Palestinian security men and civilians remained in the Church of the Nativity. An Israeli military source said of the more than 120 people still inside, 10 of them are on Israel`s most-wanted list.