Israelis, Palestinians Optimistic On Renewed Talks Arafat Arrests Dozens Of Militant Hamas Leaders, Closes Their Welfare Offices

Israeli and Palestinian leaders said on Sunday that they expected their meeting with Secretary of State Madeleine Albright in New York on Monday would lead to the revival of long-stalled committee talks on such issues as the release of Palestinian prisoners and an airport in Gaza.

But both Israelis and Palestinians have cautioned against expecting that the new contacts would lead to a resumption of substantive talks on advancing the peace.

The meeting scheduled for today was preceded by several conciliatory gestures from both sides. On Sunday, Prime Minister Benjamin Netanyahu told his Cabinet that he had spotted the “first, preliminary steps” by the Palestinian Authority to crack down on Islamic terror groups, which the prime minister has set as the condition for continuing the diplomatic process.

Netanyahu, who predicted that the Monday meeting would lead to the resumption of committee talks, also announced that he was releasing $17 million more of the tax money his government has withheld from the Palestinians since a suicide bombing in July, and that he would allow 8,000 more Palestinian workers back into Israel, bringing the total to 29,000. He had released $47 million of the tax money in two earlier actions, and about $17 million remains unpaid.

The seizure of the funds and the limits on Palestinians allowed to work in Israel had led to serious economic dislocation in the Gaza Strip and the West Bank, and Albright had specifically criticized the financial punishment during her recent visit as counterproductive.

On the Palestinian side, Yasser Arafat and his Palestinian Authority have stepped up their offensive against militant Islamic organizations, arresting dozens of Hamas leaders in the West Bank and Gaza and closing 16 Hamas welfare organizations in Gaza that, officials said, gave support to Hamas’s Qassam military wing, which was responsible for terror attacks.

Ahmed Tibi, an aide to Arafat, told The Associated Press on Sunday that he too expected the meeting in New York to lead to renewed talks.

But all sides cautioned against overoptimism as gloom continued to deepen in the Middle East. In the last week, the Israeli army was reported to be training for war with the Palestinians, Hamas threatened more attacks, Netanyahu promised more settlements, and the departing American ambassador, Martin Indyk, sadly acknowledged that “the dream of peace, on some days recently, seems to be turning into a nightmare.”

Albright’s meeting in New York with Foreign Minister David Levy and the Palestine Liberation Organization’s negotiator, Abu Mazen, was the major fruit of her first official visit to Israel this month.

In a statement from New York, where Albright has been for the opening of the U.N. General Assembly, the State Department said she had “worked assiduously” to restart direct talks and hoped that her meeting on Monday would produce results. The department spokesman, James Rubin, said in the statement, however, that there was “still a great deal of work to be done in the coming days and weeks if the promise of peace in the Middle East is to become a reality.”