July 18, 1999
Web posted at: 8:47 p.m. EDT (0047 GMT)

In this story: 'Jerusalem is our capital forever' No withdrawal to '67 borders Barak: No U.S. troops needed in Golan Heights RELATED STORIES, SITES

From staff and wire reports

JERUSALEM (CNN) -- The United States will give Israel $1.2 billion to help it pay to withdraw troops from the West Bank under the terms of a U.S.-brokered peace deal, Israeli media reported on Sunday.

U.S. President Bill Clinton told Israeli Prime Minister Ehud Barak, who wraps up a five-day visit to the United States on Monday, that he would release the money promised to Barak's predecessor, Benjamin Netanyahu, the daily Yediot Ahronot said.

The proposed financial assistance was frozen after Netanyahu suspended the Wye River peace accord. Barak met with Clinton in Washington and Maryland last week.

The accord calls for two more troop withdrawals from roughly 13 percent of the West Bank. Netanyahu carried out the first withdrawal in November.

Barak said on Sunday that he was determined to re-establish the momentum of the peace process.

"This is the essence of the mandate I've got from the Israeli people:" he said on CNN's Late Edition. "To strengthen Israel, to strengthen our security and to make a real effort to put an end to this 100-year conflict."

The U.S. aid would be used for bypass roads to connect Jewish settlements in areas to be turned over to the Palestinians and for extra security costs resulting from the pullout, the daily said.

'Jerusalem is our capital forever'

While Barak has left open the possibility of a Palestinian state, he stood firm against ceding any part of Jerusalem as Israel's capital.

Barak and his wife Nava were guests of the Clintons at the White House for dinner on Sunday

"I am not a prophet. I am the leader of Israel," Barak said on NBC's Meet the Press on Sunday. "When the time comes, the Palestinians will have to negotiate with us what kind of entity is shaped for them in a context, a wider context, of all the other issues that are on the table."

In the interview, Barak ruled out the possibility of dividing Jerusalem: "A united, sovereign Jerusalem is our capital and will remain so forever."

Barak declined to discuss the issue of extending the borders of present-day Jerusalem because of "the very delicate negotiations that we have to run with the Palestinians."

Barak said he did not expect Palestinian refugees would be allowed to return to Israel, despite Clinton's stated wishes that they be allowed to do so.

No withdrawal to 1967 borders

Israeli Foreign Minister David Levy said Barak had told Clinton of his "red lines" in a final peace deal with the Palestinians: Israel would not withdraw to its pre-war border of 1967, when it captured the West Bank and Gaza; Jerusalem would remain united under Israeli rule; most Jewish settlers would remain in West Bank blocs; and Israel would not allow an international army west of the Jordan River.

Barak has promised to withdraw troops from south Lebanon within a year -- a step that requires progress in peace negotiations with Syria, the main power broker in Lebanon.

Barak said Israel's policy on returning the Golan Heights, captured from Syria in 1967, hinged on President Hafez Assad's stance on a wide range of other issues, including security arrangements and possible economic cooperation.

"We fully realize that on the way to peace we will have to make compromises, but it is too early to define what kind of compromises," Barak said. "We will define it once we realize what President Assad is ready to give."

Barak: No U.S. troops needed in Golan Heights

Barak said he did not think U.S. troops would be needed on the Golan Heights to police any future peace deal there, although "maybe there will be a need for a few dozens of foreign observers."

Barak's chief-of-staff, Danny Yatom, said both Barak and Clinton believed peace breakthroughs with Syria and the Palestinians were possible before U.S. elections in November 2000.

"The estimate is that within around 15 months, about a year and a half, we'll be able to say if we reached a breakthrough or not. I hope we'll reach a breakthrough," Yatom told Israel Radio.

Barak telephoned Arafat to brief him on the progress of his trip.

Correspondent Jonathan Aiken and Reuters contributed to this report.

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