Fractured government greets envoy on latest peace mission

The State Department's Middle East envoy, Mr Dennis Ross, arrived in Jerusalem yesterday to face a bomb-scare at his hotel, a…

The State Department's Middle East envoy, Mr Dennis Ross, arrived in Jerusalem yesterday to face a bomb-scare at his hotel, a hardline demonstration accusing him of betraying his Jewish roots, and, more significantly, an Israeli government that appears to have lurched to the right.

Mr Ross, who met last night both the Prime Minister, Mr Benjamin Netanyahu, and the Palestinian President, Mr Yasser Arafat, is preparing the ground for visits by the two leaders to the White House in a fortnight's time.

A few hours before his talks with the special envoy, Mr Netanyahu convened his most senior ministers to finalise strategy. But the resignation of his Foreign Minister, Mr David Levy, took formal effect today, so Mr Levy did not come. And the Defence Minister, Mr Yitzhak Mordechai, apparently informed too late of the urgent consultation, was in southern Lebanon.

In the absence of these two relative moderates, Mr Netanyahu ended up holding a tete-a-tete with his Infrastructure Minister, Mr Ariel Sharon, a relentless critic of the very Oslo accords that the US Administration wants Israel to honour. While Mr Netanyahu publicly assured Mr Ross that his government intended to "advance the process to real peace", leaks from the Ross-Netanyahu talks suggested that the prime minister is backtracking on earlier talk of handing over 10 per cent or more of the West Bank to Palestinian control in the next phase of troop withdrawals, and is instead determined to limit the scope of the handover to 8 or even 6 per cent.

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Mr Arafat's Palestinian Authority, which today controls some 27 per cent of West Bank territory and seeks to gain another 30 per cent in the next Israeli pullback, is adamant that the Clinton Administration must exert heavy pressure on Mr Netanyahu to moderate his stance.

Mr Saeb Erekat, the chief Palestinian negotiator, accused the US of allowing Mr Netanyahu to behave "above the law," and said his policies were leading the region "into the abyss".

In the wake of Mr Levy's resignation, Mr Netanyahu appears caught in an impossible position: the coalition right-wingers are vowing to bring him down if he carries out any further withdrawals, while the more moderate members threaten him with the same fate if he doesn't move the Oslo process forward. By planning strategy with Mr Sharon yesterday, Mr Netanyahu signalled that he might have opted to try and keep the right-wingers happy, while defying the moderates. There are even rumours that he intends to appoint Mr Sharon as his new foreign minister.

At the same time, though, the prime minister is reported to have made a similar approach to the former Labour Party leader and prime minister, Mr Shimon Peres, although Mr Peres declined to go into details yesterday.