US and Europe spar over Arafat's future


At the G8 summit US and Europe sparred over the destiny of the Palestinian leader, Mr Yasser Arafat, as sharp divisions over President Bush's Middle East policy burst into the open.

Mr Bush, beset by a rising tide of European criticism, downplayed the rifts over the Middle East, insisting that the feedback to his plans had been favourable.

"The response has been very positive. And for that, I'm grateful," he said, referring to his calls for reform of the Palestinian Authority, as he met the Russian President, Mr Vladimir Putin.

European officials begged to differ.

"There is a need to reform the Palestinian Authority but that does not mean that Arafat has to go," a European official said on condition of anonymity. "We are not going to tell Arafat to go."

The German Chancellor, Mr Gerhard Schröder, bluntly made clear that Mr Arafat was still in the picture.

"As long as he is the president (of the Palestinian Authority) . . . he remains our interlocutor," Mr Schröder told German television, the morning after Mr Arafat's fate preoccupied G8 leaders at a working dinner.

Mr Bush on Monday warned Palestinians they must replace Mr Arafat with a leadership "not compromised by terror" before they could realise their dream of an independent state. But Mr Arafat threw down a challenge to the US leader, pledging to test his power base in elections he has called for January.