Lebanese president denies getting offer to settle Palestinian refugees

Lahoud

BEIRUT (Reuters) -- Lebanon's presidential palace on Tuesday denied a newspaper report quoting President Emile Lahoud as saying that Beirut had received an international offer of $20 billion to settle Palestinian refugees living on its territory.

An-Nahar newspaper quoted Lahoud as saying "international parties" had offered the money if Beirut would abandon a long-standing policy of denying settlement to 360,000 registered refugees and their descendants whose homes have been occupied or destroyed by Israel since 1948. No specific organisations were mentioned.

"This ($20 billion) figure nears Lebanon's public debt, which is an important factor of the pressures that are being exerted on us," An-Nahar quoted Lahoud as saying in an article entitled "an informal discussion with President Lahoud," which led its Tuesday supplement.

A spokesman at the palace said: "It was not an interview. The president was misquoted. The report has no basis."

An-Nahar, Lebanon's leading newspaper, stuck by its report. Abdel Hadi Mahfouz, editor of the supplement, said Lahoud told him that Lebanon was offered $20 billion but thought the conversation was off-record.

"The president did not expect his remark about the $20 billion to be published. But he said it and was adamant about refusing settlement," Mahfouz told Reuters.

Local bankers have expressed hope that Lebanon would receive compensation for settling the refugees and pay down the debt, which is more than 140 percent of the nation's gross domestic product.

Lebanon's $21 billion public debt has mostly accumulated since 1992 to pay for post-civil war reconstruction, a massive bureaucracy, an army and security apparatus.

The fiscal problem has become more acute with debt service alone exceeding government revenues in the first half of the year.

Diplomats and international financiers said outside compensation to rescue state finances was wishful thinking on the part of some Lebanese they met, and that Beirut had to take difficult decisions such as privatization and administrative reform to solve its debt problem.

There are about 3.5 million registered Palestinian refugees scattered around the Middle East. Those in Lebanon are banned from most work and deprived of civil rights. Because they are mostly Sunni Moslems, making them citizens is seen as upsetting the delicate "sectarian balance" of Lebanon's political system.

The refugees, a main subject of the failed Camp David Middle East Summit last month, enjoy better status in Syria and Jordan. They are entitled to return to their land or receive compensation under U.N. resolutions.

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