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Arab summit marks shift in roles for key leaders. AGENDA: PALESTINIAN UNREST

Last November it was the massive Army of Iran, poised menacingly near the Gulf, that drew the leaders of the Arab world to their first full-scale summit in over four years. Eight months later, stone-throwing Palestinian youngsters have brought them back together.

As leaders of the 21 nations of the Arab League began to converge yesterday on Algiers to consider the six-month Palestinian intifadah (uprising) in the Israeli-occupied West Bank and Gaza Strip, Israeli troops made dozens of arrests in Gaza.

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Not only has the Arab agenda been transformed, but key Arab leadership roles have also been reversed.

Jordan's King Hussein, the main mover and shaker at last November's summit in Amman, has been eclipsed by the uprising and will have to struggle to hold his own in Algiers.

Yasser Arafat has become the Algiers summit's main attraction. The Palestine Liberation Organization (PLO) chairman was virtually ignored in Amman.

Syrian President Hafez Assad was the odd man out in Amman because of his support of Iran. If he even bothers to come to Algiers, Mr. Assad will find his position stronger, his reputation for diplomatic dexterity enhanced by Syria's recent successful ``peacekeeping'' operation in Beirut's southern suburbs.

This week's summit, which was requested by the PLO, will be the first Arab summit since 1974 held in Algeria, whose patient, ultimately successful, revolt against French colonial rule in the 1950s is viewed by some Palestinians as a model for their own struggle. The main purpose of the summit will be to coordinate Arab backing for the uprising.

Elements of a hoped-for ``Arab strategy'' to advance the uprising include harnessing Arab economic clout, expressed in billions of dollars worth of foreign investments, to encourage Western governments to pressure Israel to end its 21-year occupation of the territories.

The effort will be made against the background of years of reluctance by the Arab nations to provide more than rhetorical support for the Palestinian cause.

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For the PLO's Mr. Arafat, the main political objective in Algiers will be to gain support for resolutions that will dislodge Jordan from its central role in Middle East peacemaking efforts. In particular, the PLO will seek reaffirmation of the Rabat resolution of 1974 confirming the PLO as the sole legitimate representative of the Palestinians and as the only entity entitled to impose its authority on any territory relinquished by Israel.

In advance of the summit, United States officials have quietly sought to convince the Arab governments not to adopt resolutions which, by cutting Jordan out of the peace process and hardening Israel's position, could kill possibilities for a negotiated solution to the Arab-Israeli conflict.

The US is especially concerned about possible resolutions condemning Secretary of State George Shultz's peace initiative and endorsing the establishment of an independent Palestinian state.

Both are said to be major objectives of the PLO at the summit, but are unlikely to draw enthusiastic support, especially from the block of moderate Arab states led by Jordan. No Arab state has so far fully rejected the Shultz plan.

The PLO is also eager to become the custodian of the funds to support the intifadah raised by various ``popular committees'' in the Arab countries.

An estimated $5 to $6 million has been raised in Jordan alone but has not been disbursed pending instructions from the summit. The PLO would stand to gain politically if it, rather than the Arab governments themselves, were designated by the summit as disbursing agent.

Any gains in this regard may prove academic since Israel tightly controls the flow of outside money to the territories.

In addition to Jordan, which stands to lose most in Algiers, Saudi Arabia has also responded cooly to the summit because it risks distracting attention from the situation in the Gulf.

For Syria, the summit will pose the delicate problem of supporting the uprising without inflating the position of Arafat. Despite the budding reconciliation between Arafat and Assad, the two have competing claims to Palestinian loyalties.

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