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The latest peacemaking effort in the 14-month-old Iran-Iraq war appears to have fallen through, and some of the most bitter fighting since the war began is now taking place, Western monitors report.

Last week, at the end of a 10-day diplomatic swing through the Arabian peninsula, Syria's President Hafez Assad met with Iranian envoys. There was widespread speculation that a new effort was under way to end the Gulf war. But fighting is reported to be raging in Iran's Kermanshah Province. Even discounting for the usually inflated casualty figures, losses appear to be very high.

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Other fallout from the Gulf war the shelling of an oil tanker that was loading Iraqi crude at the Tripoli, Lebanon, terminal of a trans-Syria pipeline. Then there was an explosion and fire on the pipeline itself. The line had been open only 10 days after being unused for five years.

The increasing pace of the war has prompted Iraq to call on all Arab countries to break off diplomatic relations with Iran. Mideast analysts believe Bahrain, Kuwait, the United Arab Emirates, and Saudi Arabia may be preparing to do so due to continued evidence of Iranian subversion in these countries.

Those holdout settlers in the Sinai town of Yamit promise to get more attention as the April 25 deadline for the turnover of Sinai territory to Egypt approaches. But Israeli authorities say they intend to make sure Yamit is evacuated nonetheless.

Instead of forceably removing the settlers now, and being faced with running battles until April 25, Israeli officials say they will continue negotiating over compensation and not attempt police action until the very end.

Observers in Israel say settlers in Sinai have never inspired as much respect as settlers in more vulnerable areas, such as the Golan Heights. They contend that the Yamit holdouts are not occupying the town for nationalistic reasons but to extract maximum compensation from the government before moving on.

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