ISRAEL:Israel's president Shimon Peres said yesterday he saw a "real opportunity" to make peace with the Palestinians and highlighted progress on both political and economic agreements ahead of further talks to be held in the US this autumn.
In an interview, Mr Peres said Israeli and Palestinian leaders were now negotiating a "declaration of principles" for talks in Washington that would include a mention of the political, if not the geographical, outline of a future Palestinian state.
At the same time, Japan was expected to invest $100 million (€74 million) in one of two proposed industrial parks in the West Bank. The first would be built near Jericho and would include Palestinian access to a new airport to be built in western Jordan.
"The feeling in all quarters is that we have a real opportunity parallel to the economic activities to arrive at an agreement with the Palestinians," said Mr Peres. "Technically what we are talking about is to prepare a declaration of principles that will be submitted to the conference."
The meeting comes at a time of heightened diplomacy, with several visits to the region by US secretary of state Condoleezza Rice and the appointment of Tony Blair as representative to the quartet of Middle East negotiators. Mr Blair, who is to focus on Palestinian institutions and economic development, is expected back in Jerusalem early next month.
Israeli newspaper Haaretz reported this month that Mr Peres had proposed offering the Palestinians land equivalent to 100 per cent of the occupied territories. Israel would retain settlements on 5 per cent of the West Bank and would exchange an equal amount of land from Israel. The office of the Israeli prime minister, Ehud Olmert, who is leading the negotiations, denied that such a plan was being considered.
Mr Peres refused to be drawn on the proposal and said Mr Olmert and Palestinian president Mahmoud Abbas were still negotiating details of the declaration.
A senior Israeli government source said the declaration was unlikely to mention permanent borders, but would either outline temporary borders or refer to land without mentioning the location of borders. Defining a future Palestinian state's borders is a core issue of any peace agreement, along with the fate of Palestinian refugees and a decision on Jerusalem, wanted by each side as their capital.
Israel believes it can hold on to three of the main West Bank settlement blocs: Ariel, north of Jerusalem, Ma'ale Adumim, east of the city, and Gush Etzion, near Bethlehem.
Mr Peres (84) a former Nobel Peace Prize winner and twice prime minister, emphasised his long-standing plan for economic regeneration in the West Bank. The two new industrial parks would allow exports of Palestinian products across the region.
Palestinian officials said this week they supported this idea but said there were still disagreements over the site of the park and who would have sovereignty of the crossing between Jordan and the West Bank.
Mr Peres said: "The whole philosophy is that I believe we hang too much on strategy and too much on diplomacy and we ignored almost completely the economic potential that can lead to peace."
The World Bank this year said the 540 Israeli checkpoints and barriers across the West Bank were making business for Palestinians extremely difficult. The UN said the number of checkpoints had risen in recent years. Mr Peres said the army was looking at reducing the number.
Some Palestinians have warned that a peace agreement is unlikely to work without the involvement of Hamas, the Islamist movement which won parliamentary elections last year and which has been isolated by Israel and the West, particularly since it seized full control of Gaza in June after fighting with its rival, Fatah.
But Mr Peres was critical of Hamas: "Gaza divorced itself from the peace process. Now the Gazan people have to decide what are they going to do - to produce missiles or provide food to their children. If they continue to shoot missiles we shall reply, obviously."
He ruled out peace talks with the Islamist group. "If you say 'participation of Hamas' there will never be negotiations. They don't want to negotiate."