Powell meets Israeli PM-elect Sharon

Barak shakes hands with Powell before their meeting in Jerusalem on Saturday

JERUSALEM (CNN) -- U.S. Secretary of State Colin Powell has begun talks with Israeli Prime Minister-elect Ariel Sharon that are expected to give the first real clues to U.S. President George W. Bush's policy on the failing peace process.

Powell met the new Israeli leader at Jerusalem's King David Hotel where the two men shook hands for reporters before settling down to talks.

The new Secretary of State, on his first diplomatic tour since taking office, is due to travel to the West Bank town of Ramallah later Sunday for talks with Palestinian Authority President Yasser Arafat.

Among other Middle East issues, officials said Powell will urge Israel to release millions of dollars raised from sales taxes for the Palestinian Authority, which is in dire financial straits after four months of clashes between Palestinians and Israeli forces.

Powell's talks come a day after the retired general met with outgoing Israeli Prime Minister Ehud Barak. Earlier on Saturday Powell also met with Egyptian President Hosni Mubarak and Foreign Minister Amr Moussa in Cairo, Egypt. He also met with Russian Foreign Minister Igor Ivanov, describing their talks as an "excellent discussion."

VIDEO CNN's Andrea Koppel reports on what challenges Powell faces in Israel (February 24) Play video (QuickTime, Real or Windows Media) CNN's Ben Wedeman reports on Powell's visit to Egypt Play video (QuickTime, Real or Windows Media) CNN's Jerrold Kessel reports on issues the U.S. secretary of state will face in Israel Play video (QuickTime, Real or Windows Media)    ALSO Former President Bush marks Gulf War anniversary Sharon urges closer U.S.-Israel ties    TIMELINES Recent acts of violence in the Middle East:  • Bombings  • Activist deaths

MESSAGE BOARD Mideast peace

At a news conference after meeting with Mubarak, Powell said that sanctions against Iraq have been effective but could be revised to focus more closely on Saddam Hussein's government. Powell and Moussa also announced that Mubarak has accepted an invitation from U.S. President George W. Bush to visit Washington on April 2.

The sanctions have been in place since Iraq's 1990 invasion of Kuwait and the resulting Persian Gulf War of 1991, in which Egypt was a key U.S. ally. The sanctions are meant to keep Iraq from rebuilding its weapons programs, but they have become increasingly unpopular as they take a growing toll on Iraqi civilians.

"Our policies have strengthened the security of neighbors of Iraq, and these are policies that we are going to keep in place," Powell said. "But we're always willing to review them to make sure that they're carried out in a way that does not affect the Iraqi people but does affect the Iraqi regime's ambition and ability to acquire weapons of mass destruction."

Moussa said meetings this week between Iraqi officials and U.N. Secretary-General Kofi Annan could offer an opportunity to come up with a new plan for the sanctions. Iraq said on Saturday it would insist on a total lifting of the U.N. embargo, rejecting U.S.-British ideas of switching to "smart sanctions" that would focus on monitoring arms imports.

"Whether they are smart or stupid sanctions, we will reject them," Trade Minister Mohammed Mehdi Saleh declared in Baghdad.

"This meeting should be given full opportunity for both sides to talk and to listen," he said. "We'll see what will come of that."

Powell said no details of any revised sanctions were discussed in his talks in Cairo.

"We spoke in general terms about the sanctions regime," he said. "Specifics will come later."

Powell's visit is part of a four-day Middle East tour that will take him to Israel, Saudi Arabia, Jordan, Syria and Kuwait. Powell, who was the chairman of the U.S. Joint Chiefs of Staff during the Gulf War, will participate in a Kuwaiti ceremony marking the 10th anniversary of the emirate's liberation from six months of Iraqi occupation.

Powell meets with Mubarak in Cairo, Egypt, on Saturday

His trip to the region comes just over a week after U.S. and British planes conducted airstrikes on radar sites near Baghdad. Powell acknowledged that the raids attracted "quite a bit of criticism" in the Arab world but noted that Iraqi weapons "are being aimed at Arabs, not at the United States or at others."

Earlier, he said he had "a very, very excellent discussion" with Ivanov, his counterpart from Moscow. Powell and Ivanov met for 90 minutes in Cairo amid a recent chill in relations between the two countries, including differences over U.S. plans for a missile defense system and the arrest of an FBI agent accused of spying for Moscow.

Ivanov said the meeting was very constructive and frank, with the two "exchanging principles at issue" for U.S.-Russian relations, and urgent international matters.

"We will continue to look for points of coinciding," Ivanov said.

Observers said the session was likely to set the tone for U.S.-Russian relations under the new American administration. Powell carried a personal message from President Bush to his Russian counterpart, Vladimir Putin.

Powell was expected to make the Bush administration's case for the ballistic missile defense system opposed by the Russians.

Powell and Ivanov before their meeting in Cairo on Saturday

Though early tests have yielded only limited success, U.S. plans for a national missile defense have managed to rankle Russian officials. The Russians say an American missile defense would effectively scrap the 1972 Anti-Ballistic Missile Treaty, which they consider the cornerstone of arms-control efforts. And some European allies fear the project may trigger a new arms race.

Russian officials have proposed a smaller, mobile system as an alternative to the planned $60 billion U.S. system. Powell called the proposals "quite interesting" but said he believed that after initial review there "isn't a lot there." However, he said it was encouraging that Moscow has "come forward and said 'Yes, there is a threat.' "

The recent chill in relations between Washington and Moscow was exacerbated by this week's arrest of FBI agent Robert Hanssen on charges he spied for Russian intelligence. Powell said the Hanssen case was "being tackled in other channels" and was not expected to come up.

Powell was also expected to seek Russian support of continued sanctions on Iraq. Russian officials are eager to see the sanctions lifted, since Iraq owes Russia more than $8 billion.

Cairo Bureau Chief Ben Wedeman, State Department Correspondent Andrea Koppel and Reuters contributed to this report.

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