Bush turns up pressure on Arafat

WASHINGTON (CNN) -- In his strongest statement to date, President Bush said Thursday that Palestinian leader Yasser Arafat "must renounce terror" and "work hard" to get back to the peace table.

Bush did not accuse Arafat of involvement in a shipment of weapons and explosives intercepted at sea by Israel last week but said the Palestinian leader must take definite steps to put an end to violence.

A senior State Department official has said the United States has been shown credible evidence that Arafat knew about and may have approved payment for the shipment, which Israel says came from Iran and was intended for the Palestinian Authority.

A senior State Department official told CNN on Thursday the operation was of such magnitude that "we have to conclude that Arafat would have known."

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Publicly, however, Secretary of State Colin Powell said the United States has developed its own information that "makes it clear that there are linkages to the Palestinian Authority." But he added: "I have not seen information that yet links it directly to Chairman Arafat."

In his comments, Bush said, "Mr. Arafat must renounce terror, must reject those who want to disrupt the peace process through terror. He must work hard to get back to the peace table. It seems like it is up to him to make these decisions."

Arafat has said he did not believe any Palestinian Authority officials were involved in the arms shipment, but he had ordered an investigation.

Sources said Powell told Arafat in a phone call Wednesday the United States questioned his denial of any knowledge of the shipment. One senior official said Powell told Arafat the "evidence was very strong" implicating him and Palestinian Authority, and that the United States expected to receive even more evidence.

The official said Powell asked Arafat to "see who was responsible and punish them."

Bush said that once it is determined who was behind the shipment, "Those responsible must be held to account."

"Like many, I'm beginning to suspect that those arms were ... to promote terror. And terror will never enable us to achieve peace. So long as there are terrorists trying to disrupt the peace process, there will never be peace," Bush told reporters before a White House meeting with his economic advisers.

Senior administration officials told CNN the nuance between what is being said publicly and privately about Arafat's role in the arms shipment is part of a strategy that avoids a harsh public condemnation of Arafat, a rhetorical escalation that would complicate U.S. efforts to forge a cease-fire between the Israelis and Palestinians.

"The irony of the U.S. position is that we know Arafat is behind it, but if we say we know we have to stop talking to him, and wash our hands and then what would happen in the Mideast?" one official said. "The idea is to put pressure privately on Arafat, tell him 'we know everything, we know you were involved,' and then keep a hand in the peace process." Israeli forces intercepted the ship last Thursday in the Red Sea about 300 miles south of the Israeli port of Eilat. Israel has said the ship was carrying 50 tons of weapons and explosives -- enough to imperil every city in Israel.

The United States has demanded that Arafat make arrests in the affair. But some on Capitol Hill privately express skepticism that the Palestinians would have been as naive as to try to bring an arms shipment from an Iranian island in the Persian Gulf to Gaza through closely monitored waters.

They have asked administration officials for a more detailed briefing on what the United States knows.

In the past, Iran has been a strong critic of Arafat and the Palestinian Authority. But U.S. officials said Iran has been a consistent supplier of arms to guerrilla group Hezbollah in Lebanon.

One lawmaker said "it is likely to turn out to be a more murky story" than is known so far.

Bush warned that Iran must participate in the war against terror.

"Any nation that thwarts our ability to rout terror out where it exists will be held to account one way or the other," he said. Speaking of the possibility that Iran had allowed some members of the Taliban and al Qaeda to flee to that country, Bush said, "We would hope they would continue to be a positive force in helping us bring people to justice."

"We would hope that if someone tries to flee into Iran, that they would hand them over to us," Bush said. "If they are part of the (anti-terrorism) coalition, they must be active members of the coalition."

Bush said the United States must remain engaged in the Mideast peace process, and he plans to send Gen. Anthony Zinni back to the region to resume his efforts to get Israelis and Palestinians back to the negotiating table. And Israel indicated that despite the fresh questions about Arafat's credibility, Israel is still prepared to talk peace with him if he brings about an end to the violence.