Mubarak meets Abbas on Mideast peace, Palestinian unity talks

Egyptian, French presidents discuss regional developments, activating EU role in Middle East

Rice to visit Middle East this week

Quartet meets in Sharm el-Sheikh Nov. 9

Livni asks for early elections after failure to form govt.

Syrian-U.S. differences escalate after recent raid

Egyptian President Hosni Mubarak held talks with visiting Palestinian President Mahmoud Abbas on the latest developments of the Palestinian issue.

Mubarak discussed with Abbas means of promoting the stalled Palestinian-Israeli peace negotiations, said the Egyptian MENA news agency.

The two leaders are expected to review the outcome of a recent visit of Israeli President Shimon Peres to Egypt.

Since the U.S.-brokered Annapolis conference on Mideast peace held in November 2007, Israel and the Palestinians have launched intensive talks to agree on the outstanding permanent status issues.

As little tangible progress has been made since the Annapolis conference, expectations are lowering for Israel and the Palestinians to clinch a comprehensive peace deal within 2008 as they pledged.

Mubarak and Abbas, who arrived for a two-day visit to Egypt, also tackled the ongoing Egyptian mediation efforts to help heal the rift among rival Palestinian factions, especially between Hamas and Fatah.

After holding a series of separate bilateral talks with representatives of some 13 Palestinian factions, Egypt offered a plan that envisions the formation of a unity government replacing the feuding Hamas administration of Gaza Strip and the Fatah-backed government of the West Bank.

The Egyptian proposal also calls on the Palestinians to agree on holding early elections and reform their security services in the two territories.

A comprehensive Palestinian reconciliation dialogue is expected to kick off in Cairo in November.

Speaking in Paris after a working lunch with his French counterpart Nicolas Sarkozy, Mubarak said Egypt was better placed than some countries to weather the economic storm but he was nevertheless concerned.

"We risk problems with our imports, and also with revenue from tourism and revenue from the Suez Canal," he said. Egypt charges vessels using the Suez route between the Indian Ocean and the Mediterranean a transit fee.

While Mubarak played down the danger, tourism and the canal are the main pillars of the economy of Egypt, the Middle East's most populous country.

Since 2000, the number of tourists visiting Egypt annually has doubled to more than 11 million and brought in 9.2 billion dollars per year, or 11.6 percent of the country's GDP. The industry employs 12 percent of the workforce.

With about 7.5 percent of world trade passing through the canal income from the waterway provides Egypt with its third highest source of foreign currency after tourism and remittances from Egyptians working abroad.

In the first six months of 2008 the route earned Egypt more than 2.6 billion dollars, half a billion more than in the same period last year, and the number of boats and ships passing rose from 9,800 from 10,497.

Mubarak and Sarkozy discussed the world economic situation and preparations for next month's Washington summit of the G20 group of wealthy and emerging nations, of which Egypt is not a member, French officials said.

Secretary of State Condoleezza Rice will visit the Middle East next week to pursue efforts for a deal on the contours of Israeli-Palestinian peace before handing over to a new US administration.

"Secretary of State Rice will travel to Israel, the Palestinian Territories, Jordan and Egypt from November 5 to 9," just after US presidential election results are likely to be known, her deputy spokesman Robert Wood said.

"She will meet with her quartet counterparts and senior government officials to discuss efforts to achieve positive and lasting peace in the region, consistent with the Annapolis process and the shared goal of a two-states solution," Wood said.

Rice helped revive the peace talks in November last year in Annapolis, Maryland, based on a "road map" launched in 2003 by the quartet of the United States, Russia, the European Union and the United Nations.

The Israelis and Palestinians pledged last year to secure a deal enshrining the road map goal of a Palestinian state living in peace next to a secure Israel by the time President George W. Bush leaves office on January 20.

Although both sides have begun tackling simultaneously the core issues of borders, the status of Jerusalem and refugees -- an adjustment to the roadmap -- they have made little visible progress toward achieving that goal.

Wood did not say exactly when the quartet would meet.

But an Egyptian official said the quartet will meet in the Red Sea resort of Sharm el-Sheikh on November 9 -- the same day Palestinian groups begin reconciliation talks in Cairo -- to review the peace negotiations.

And a European Union diplomat in Brussels said that the meeting would be held from November 8-9 and include Israeli and Palestinian delegates.

On September 26, on the sidelines of the UN General Assembly in New York, the quartet members urged Israel and the Palestinians "to make every effort to conclude an agreement before the end of 2008" on all the core issues.

The quartet said it would be informed of the progress in negotiations during a meeting with the parties in the region before the end of the year.

The quartet has come under criticism from aid agencies, which warned last month that it was "losing its grip" on the peace process and must radically revise its approach.

It will be Rice's 19th visit to the Middle East in two years, and the eighth visit since she and Bush hosted the international conference in Annapolis.

The negotiations -- the first to take place since previous ones collapsed in bloodshed in 2000 -- have stumbled on Jewish settlement building in the West Bank and Jerusalem.

They are also complicated by the division of the Palestinian territories into a West Bank run by the US-backed Palestinian Authority and a Gaza Strip run by the Islamist movement Hamas, which seized power there in June last year.

The negotiations are also hobbled by "lame duck" US and Israeli governments which will be replaced in the New Year by administrations infused with new popular mandates from national elections.

With chances of a breakthrough appearing slimmer than ever, Rice has nonetheless pledged to leave "no stone unturned" in her quest for a deal defining the contours of peace by January 20.

As time draws near "for the end of this administration, I still believe that we must make every effort in the time that we have to lay this foundation for peace," Rice told a conference here two weeks ago.

Meanwhile, Kadima Party leader Tzipi Livni, unable to form a new coalition government, said Sunday she has asked Israeli President Shimon Peres to hold early general elections. The likelihood of holding snap elections became a near-certainty Friday, when the ultra-Orthodox Shas party rejected a bid to join a coalition headed by Livni, who would have become prime minister. Other minority parties also rejected her invitations. Livni spokesman Gil Messing said the elections would most likely be held in mid-February. Earlier, Messing said Livni had to choose between "blackmail" and elections. Livni opted not to give in to "unreasonable" demands, he said. The developments further imperil President Bush's desire for the Israelis and Palestinians to reach a peace deal by the time he leaves office in January. Livni had submitted coalition proposals to the Pensioner's Party and the Meretz Party. The Pensioner's Party, with four seats, said the offer was far from acceptable and pulled out of talks, telling Israeli newspaper Haaretz, "in this situation there is no point in engaging in negotiations -- it's a waste of time." Shas, which has been known for its hardball negotiating demands, said it could not reach agreement with Livni on two major points -- increasing welfare payments to the poor and the final status of Jerusalem. Roy Lahmanovich, the Shas party spokesman, said the Council of Sages of Shas, headed by Rabbi Ovadia Yosef, had decided in a phone referendum not to have its 12 parliament members join a coalition led by Livni. Shas negotiators offered alternatives to Livni's proposal that she did not accept, according to Lahmanovich. On September 17, Livni narrowly won the Kadima Party primary to become party leader, beating out her more conservative rival, Shaul Mofaz, the current transportation minister and the former defense minister. Livni's 1 percent victory over Mofaz led her political rivals, chief among them Likud opposition leader Benjamin Netanyahu, to declare Livni did not have a real mandate to govern Israel. Egypt is planning to host a meeting of the Middle East peace Quartet on November 9, the same day Palestinian groups begin reconciliation talks in Cairo, a foreign ministry spokesman said.

"There are ongoing talks to hold the meeting on November 9," Hossam Zaki told AFP, adding that the talks in the Red Sea resort Sharm el-Sheikh will review the status of Israeli-Palestinian peace negotiations.

The Quartet is composed of the United Nations, the United States, Russia and the European Union. It was launched in 2002 to oversee implementation of a US sponsored "roadmap" for peace between Israel and the Palestinian Authority.

The Sharm meeting will take place almost a year after US-hosted talks in Annapolis, Maryland, sought to revive the peace process, although little visible progress has been made since then.

The two sides remain deeply divided on the core issues of the decades-old conflict, including the future status of Jerusalem, the fate of some 4.6 million Palestinian refugees and continuing Israeli settlement activity on occupied land.

The Quartet has come under criticism from aid agencies, which warned last month that it was "losing its grip" on the peace process and must radically revise its approach.

According to Arab peace initiative, in exchange for normal relations with the 22 members of the Arab League, Israel must withdraw from all the territories occupied in 1967, support the establishment of a Palestinian state with (East) Jerusalem as its capital, and agree to a just solution of the refugee problem on the basis of UN General Assembly Resolution 194.

Almost a year has passed since Livni began negotiations with Ahmed Qureia (Abu Alaa). To date the foreign minister has not achieved significant progress toward understandings on any of the issues. She has not presented a map delineating borders, has declared that no refugee will be allowed to return to Israel, and has avoided serious discussion of Jerusalem. As far as is known, she was ready to promise Shas chairman Eli Yishai that her government would not offer the Palestinians any concessions in the old city.

She also rejected the demand of Meretz to mention the Arab peace initiative among the government's basic guidelines.

To that end, it will not be enough to flaunt her refusal to surrender to the "political blackmail" of Shas. The candidate of the ruling party for the premiership will have to reveal to the electorate the positions she presented in negotiations with the Palestinians. Because the positions of the Palestinians and of the Arab League have barely changed during the past year, it will not be difficult for people to find the differences.

And where is the Labor Party, the one that paved the way for dialogue with the Palestinians and eight years ago began the negotiations over the final status agreement? If the defense minister is afraid to present his own peace initiative, why doesn't he evacuate several mega-outposts and stop the construction in the settlements entirely? But instead of demanding that Livni give an accounting of her achievements in the negotiations with the Palestinians, Ehud Barak last week repeated the mantra that Abu Mazen is not ready for a peace agreement. It turns out that in the draft of his coalition agreement with Livni, there was no mention of the Annapolis process, of evacuating outposts or of freezing settlements.

The time has come for someone to tell him that Benjamin Netanyahu has won the battle over the declaration that "there is no partner," but the battle for peace is still on.

In Damascus, EU foreign policy chief Javier Solana held talks with Syrian President Bashar Assad on the Middle East peace process and regional issues, highlighting improved ties between the EU and Damascus.

Solana and Assad discussed bolstering links between Syria and the EU and they agreed "to pursue consultations on regional and international issues," the official Syrian Arab News Agency (SANA) said.

"Syrian-European ties continue to make progress," SANA quoted Solana as saying. He voiced hope that both sides might next year sign an "association" agreement.

The EU has signed such a deal with other Mediterranean countries in a bid to pave the way for the creation of a free trade agreement in 2010.

Solana said the EU "strongly supports" the Middle East peace process and is trying to play a constructive role, SANA reported. "The EU totally backs the indirect negotiations between Syria and Israel," he said.

Since May, Syria has been engaged in indirect talks with Israel under Turkish mediation.

SANA quoted Assad as saying Europe's "role in the peace process is important and essential ... Peace guarantees security and stability to the people of the region and this reflects positively on Europe and the world."

Solana's visit is his first since March 2007, when his trip signaled a resumption of EU contacts with Damascus frozen after the February 2005 assassination of former Lebanese Premier Rafik Hariri. Anti-Syrian Lebanese figures blamed Syria for the murder but Damascus has denied any involvement.

In March 2007, Solana urged Syria, the former powerbroker in Lebanon, to help ease a protracted crisis in Lebanon.

His return to Damascus comes after Syria and Lebanon formally established diplomatic ties on October 15.

Following his talks with Assad, the EU diplomat praised the "importance of developments which recently occurred in Lebanon," namely the setting up of diplomatic ties between Beirut and Damascus, SANA reported.

The United States closed its embassy in Damascus, Syria, amid rising tensions and an increased security risk, officials said.

The move was the latest step in the fallout over a U.S. air attack in northern Syria last Sunday in which eight Syrians died. U.S. military officials said the fight took place as soldiers looked for smugglers of fighter planes into Iraq.

DEBKAfile reported that military sources said the Syrian government has warned that if there are more U.S. raids Syria will break off security cooperation not only with the United States but also with Iraq on their common border.

Reports say the situation is explosive enough to lead to a Syrian declaration of war if Iraqi forces hit terrorist bases on its soil.

A U.S. embassy spokesman said concern was high about the continued threat of "terrorist attacks, demonstrations and other violent actions against U.S. citizens."

Sources said the embassy had prepared for "extreme events," such as a Syrian military siege, violent demonstrations or a direct attack that would force an evacuation of U.S. personnel.

Syria decided to close an American school and a cultural center in Damascus, in an apparent response to a U.S. military raid that the authorities said killed eight civilians.

The move marks a further deterioration in relations between the United States and Syria, which are already strained by U.S. charges that Damascus is failing to do enough to stop militants from entering Iraq to attack its forces.

Syria has expressed outrage at Sunday's helicopter raid on a village near the Iraqi border, calling it an act of "terrorist aggression." Foreign Minister Walid al-Moualem said Syria would defend itself if such an attack were repeated.

The United States has refused to publicly confirm U.S. involvement in the raid, in which residents and Syrian officials say U.S. troops landed by helicopter.

But a U.S. official, speaking on condition of anonymity, said the raid was believed to have killed a main al Qaeda operative who had helped smuggle foreign fighters into Iraq.

"What they are saying is unjustified. I deny it totally," Moualem told Reuters in London.

Syrian Culture Minister Riad Agha said the U.S. school and cultural center would remain closed indefinitely.

"We were waiting for the United States to present us with superior culture, knowledge and technology but instead they presented us with the corpses of our children on the street," he told Reuters Television.

"The Americans claim that they fight terrorism, but they are terrorism itself," Agha said.

The U.S. embassy warned Americans "that unforeseen events or circumstances may occur that could cause the U.S. Embassy in Damascus to close to the public for an unspecified period of time."

The Bush administration refused comment on reports U.S. troops conducted a raid into Syria from Iraq.

White House spokeswoman Dana Perino and State Department spokesman Sean McCormack deflected questions about the alleged raid but McCormack acknowledged Syria had lodged a protest with Maura Connelly, the U.S. charge d'affaires.

The United States acknowledged a Special Operations mission involving four helicopters in the border area but did not release details, The New York Times reported. Syria, long considered a staging area for insurgent activity in Iraq, claimed eight people were killed.

Perino said she could not comment on whether the alleged mission was successful or even if it took place.

The Syrians said the raid was conducted in Abu Kamal, near the Iraqi border.

For his part, Syrian Foreign Minister Walid al-Moualem accused the United States of carrying out a "terrorist aggression" on Syria after a deadly raid which Damascus said killed eight civilians.

"The Americans do it in the daylight, this means it is not a mistake, its by blunt determination. For that we consider this criminal and terrorist aggression," Moualem told a news conference in London.

He said Syria will ask the United States and Iraq for an investigation into the attack, which took place in the Albou Kamal area in eastern Syria. Baghdad has said the strike targeted insurgents who attack Iraq.

Iraq is waiting for the United States to provide details of a deadly U.S. military raid on a Syrian border village, Iraqi government spokesman Ali al-Dabbagh said.

The government of Prime Minister Nouri al-Maliki has opened an investigation into the incident and has said Iraq must not be used to stage attacks on other nations.

"We have not received any details from the United States. We have put a request to be informed about the incident," Dabbagh told Reuters on the sidelines of a World Economic Forum meeting in Istanbul.

"We have expressed our position that Iraq is not accepting this kind of aggression that is creating difficulties with our neighbors," he said.

Syria says eight civilians were killed in the attack, which occurred in an area close to Syria's border with Iraq and which Damascus has angrily condemned as "terrorist aggression" by the United States.

Washington has yet to officially confirm the raid but officials have said on condition of anonymity that the operation is believed to have killed a major al-Qaeda militant responsible for smuggling foreign fighters into Iraq.

Dabbagh also called on Damascus to halt to what he described as insurgent activity inside Syria and to step up intelligence cooperation and border patrolling.

"We would like the Syrians to act as good neighbors, but we are not satisfied with the level of cooperation from the Syrians," he said.

Dabbagh said relations between Baghdad and Damascus should not be affected by the raid.