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The Arab world on Wednesday welcomed the left-leaning Labor Party's victory in Israeli elections, expecting the hard-liners' ouster to improve the chances of Middle East peace.

The Palestine Liberation Organization (PLO) called for a dialogue with Yitzhak Rabin, the Labor Party leader, who is expected to form the new Israeli government.

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Jordan and Lebanon cautiously welcomed the change, and Egypt expressed strong belief it would have a positive impact on the peace talks.

The hard-line government of Syria refrained from comment. But a newspaper editorial cautioned Arabs against too much optimism over the results of Tuesday's poll.

Like the right-wing Likud Party, Labor is opposed to a Palestinian state. But Rabin is more flexible on granting Palestinians autonomy and freezing the settlement of Jews in Arab territories occupied in 1967.

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