Israel and the PLO began final status talks at the Egyptian Red Sea resort of Taba on 5 May. The negotiations, which are scheduled to take three years, are designed to end with the signing of a final peace settlement between the two sides. However, an agreement will only be forthcoming after the most intractable and emotive issues separating them are resolved.

The talks are the third and final stage of negotiations between Israel and the PLO as laid out in the Declaration of Principles signed in September 1993. The first stage was the Israeli withdrawal from Gaza and Jericho, agreed in May 1994. The second stage was the interim agreement, signed in September last year, which allowed for the expansion of Palestinian self rule into much of the West Bank.

Progress in the latest talks is largely dependent on Israel’s Labour Party winning the 29 May general election. Although Likud has said it will enter final status talks with the Palestinians, the gap between the two sides would be virtually unbridgable.

The main issues to be resolved during the talks are

Jerusalem. Israel’s two main parties say that the city should remain undivided under Israeli sovereignty. The PLO wants East Jerusalem to be the capital of a future Palestinian state.

Labour doves and a number of Palestinian officials have suggested keeping the city open and united, but with separate Arab and Jewish municipalities. However, Israeli Prime Minister Shimon Peres fears that an Arab municipality might unilaterally declare itself independent and the capital of a Palestinian state.

Palestinian refugees. In principle, the PLO still wants the implementation of UN General Assembly Resolution 194, passed in 1948, giving refugees the right of return to their homes inside the Jewish state, or compensation from Israel. Informally, PLO negotiators are prepared to be flexible on the number of refugees to be resettled in the Jewish state if Israel accepts the principle of refugee return.

Israel wants the three million Palestinian refugees to stay put outside Israel. However, prominent Labour politicians say that they would not object to the resettlement of refugees in a future Palestinian state. They also say that there is scope for resettling some refugees in Israel in the framework of family reunification.

Jewish settlements. The PLO wants the evacuation of the 140,000 Jewish settlers currently living in Gaza and the West Bank. However, Palestinian officials have hinted that they might accept some Jewish settlements as long as the residents live under Palestinian jurisdiction.

Peres has been ambiguous on this issue, although he has hinted that the three large West Bank settlements of Ariel, Gush Etzion and Ma’aleh Adumim will remain under Israeli rule. Israel’s Likud party is committed to expanding the number of Jewish settlements in Gaza and the West Bank. Former defence minister Ariel Sharon, who will have a prominent cabinet post in any future Likud administration, said in March 1995 that he wanted the number of Jewish settlers to rise to 500,000.

Palestinian statehood. Palestinian leader Yasser Arafat wants the right to declare an independent Palestinian state. Peres has not ruled out a Palestinian state, but would prefer a Palestinian-Jordanian confederation. Likud rejects outright the establishment of a Palestinian state.

The exact borders of such a state are unclear. The PLO wants Israel to return to its 1967 border and provide an international corridor between Gaza and the West Bank. Peres has not talked openly about the borders of a Palestinian state, but has stated that the Jordan River should continue to be Israel’s ‘security border’, implying a continued Israeli military presence in the West Bank. He is also thought to favour the implementation of Palestinian statehood in stages, starting with the Gaza Strip.

Secret talks

Although the talks formally began on 5 May, Palestinian and Israeli officials have held secret meetings to prepare the ground. At the end of last year, Israeli cabinet minister Yossi Beilin and Palestinian minister Abu Mazen drafted a series of understandings on the central issues. These included agreement that:

A Palestinian state would be created in Gaza and the West Bank.

Israel would retain the settlements of Gush Etzion and Ariel Jerusalem would remain undivided with the Muslim holy places being declared ex-territorial areas Israel would retain the Jordan Valley for security reasons for a period of 12 years Although Arafat and Peres sanctioned the talks, they have neither publicly commented on them nor endorsed the understandings. However, the draft agreements reached by Abu Mazen and Beilin do offer a clue to what a final agreement between the two sides could look like if Labour is re-elected at the end of the month.