PRESIDENT Clinton has rebuked Israel for its plan for a new housing settlement in East Jerusalem which is creating grave tension with the Palestinians.
Mr Clinton expressed his unhappiness with the Israeli Government during the visit yesterday to the White House of the Palestinian President, Mr Yasser Arafat, who is seeking international condemnation of the proposed settlement.
"I would have preferred the decision not have been made because I don't think it builds confidence. I think it builds distrust" Mr Clinton said as he welcomed Mr Arafat at the start of their Oval Office meeting.
Mr Arafat said he was confident that President Clinton would "push to prevent" the housing settlement in East Jerusalem where the Palestinians hope to establish their own capital. Mr Arafat said that the Israeli "target is to squeeze and to isolate Jerusalem". Such a move could "torpedo" the Middle East process, he warned.
Mr Clinton refused to be drawn by reporters on the broader question of the status of Jerusalem. He said it was a "final status" issue which would have to be worked out in accordance with the 1993 agreement on the Middle East peace negotiations.
"I do not believe that ... the United States can serve any useful purpose by saying or especially by doing anything that seems to prejudge what should be a final status issue between the two parties," President Clinton said. "This is a difficult moment but I think we can work through it."
As the two leaders met, a general strike was called in Palestinian territories and east Jerusalem in protest against the planned settlement of 6,500 apartments.
At a dinner meeting of the Palestinian Arab Congress here on Sunday night, Mr Arafat said that the Israeli plan violated the accords between the two sides and was aimed at further dividing the West Bank. It would isolate Bethlehem from Jerusalem, he said.
"Not one single house should be added," he said. That part of East Jerusalem "was Arab, is Arab, will remain Arab and eventually would become capital of Palestine", Mr Arafat said.
President Clinton's criticism of the Israeli plan for further Jewish housing will be welcomed by the Palestinians who have been concerned about the direction of US policy since Mr Benjamin Netanyahu became Prime Minister of Israel last year. Mr Netanyahu was recently in Washington for talks with Mr Clinton.
This was Mr Arafat's first individual visit to President Clinton. Previously he has been here in the company with other Middle East leaders.
The President of Egypt, Mr Hosni Mubarak, and King Hussein of Jordan will both visit Washington in the coming weeks.
Peter Hirsch berg adds from Jerusalem Across the West Bank, Gaza Strip and in east Jerusalem yesterday, Palestinians closed their shops, shut schools and universities, halted public transport and stayed away from work in protest over Israel's plan to build the housing project.
Throughout the occupied territories, store fronts were shuttered and streets were largely empty. In some areas the strike was enforced by Palestinian policemen. Palestinians see the 6,500 unit project at Har Homah, a hilltop just north of the West Bank town of Bethlehem and situated in the part of Jerusalem captured by Israel during the 1967 war, as a strategic attempt by Israel to cut off east Jerusalem from the West Bank.
Palestinian leaders have warned that if the housing project goes ahead, it could well spark a fresh round of violent protest, similar to the September clashes last year in which IS Israeli soldiers and around 70 Palestinians died after Mr Netanyahu ordered the opening of an archaeological tunnel close to Muslim holy sites in Jerusalem.