November 14, 1998
Web posted at: 11:15 p.m. EDT (2315 GMT)

NABLUS, West Bank (CNN) -- Palestinians held rallies and military parades Saturday to mark the 10th anniversary of the PLO's declaration of independence.

Speaking before a crowd of thousands, Palestinian Authority leader Yasser Arafat was greeted by cheers when he said he would declare an independent state when the Oslo Peace accords expire in May.

"We are going to build our state with Jerusalem as its capital," promised Arafat. "Centimeter by centimeter, we will get land to build our state for May 1999," the Palestinian leader said.

Arafat said the creation of a Palestinian state justified his peace negotiations with Israel, which will give his people control of most of the West Bank and the Gaza Strip.

Not all Palestinians support the latest peace efforts. One group burned both Israeli and American flags at a rally in Ramallah to protest the Wye River agreement.

Arafat's new statehood promise is sure to anger Israeli Prime Minister Benjamin Netanyahu. The Israeli leader has said that if Arafat declares independence in the West Bank, Israel will annex the large chunks of land there still under control of the Jewish state.

Netanyahu's spokesman Aviv Bushinsky called Arafat's comments harmful to the spirit of the new peace deal.

"Continuing statements of this kind place the Oslo agreement in general and the Wye agreement in particular in doubt," the Bushinsky statement read.

The Wye River land-for-security deal was to enter a crucial week Monday, when Israel was to begin withdrawing troops from 13 percent of the West Bank. But because the Israeli Cabinet delayed approving the agreement, Israeli officials say the pullback probably won't begin until the end of next week.

The U.S. special envoy to the Middle East, Dennis Ross, met with both Arafat and Netanyahu Saturday.

"Our objective is have the agreement implemented," Ross said after meeting with Arafat. "Both sides have obligations and responsibilities, and we expect both sides to carry out those responsibilities and obligations."

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Senior Palestinian negotiator Saeb Erakat said he hoped Ross would push along two other parts of the agreement: opening a Palestinian airport in Gaza and releasing Palestinian prisoners from Israeli jails.

Netanyahu's office released a statement saying the prisoners due to be freed next week according to the Wye agreement would not be released until the Palestinian Authority lived up to its own obligations and arrested 10 from a list of 30 fugitives that Israel says are responsible for attacks against Israelis.

Ross also heard Palestinian grievances about Israeli plans to build a Jewish housing project on a disputed Jerusalem hilltop and Israel's plans to confiscate Palestinian-owned West Bank land for roads for Jewish settlers.

CNN Correspondent Jerrold Kessel, The Associated Press and Reuters contributed to this report.