Deal on Bethlehem standoff may be close

Israel says evidence links Arafat to terror

With a tank positioned in front of the door of the Church of the Nativity, an Israeli soldier guards the entrance to Manger Square in Bethlehem Sunday.

WASHINGTON (CNN) -- Israeli and Palestinian negotiators may be close to reaching a deal to end the 34-day-old standoff at Bethlehem's Church of the Nativity.

Israel Defense Forces officials said early Monday they were not aware of any agreement, but told CNN a great deal of progress had been made. Bethlehem Mayor Hanna Nasser said there was a good chance a deal could be reached by the end of the day.

A key issue in the talks is the number of Palestinians currently inside the church who would be sent into temporary exile, as well as where they would be taken, Palestinian officials said.

One official said a group of about 20 Palestinians would go to Gaza "for a certain period of time," and an unspecified group of others would go to another country, possibly in Europe, also for a certain period of time.

Senior Palestinian officials said serious discussions would continue through the early morning.

Palestinian sources said 123 Palestinians and 30 clergy members -- 26 priests and four nuns -- remain in the church. Israel says some of those inside are on its wanted list.

They have been holed up in the church, built on the site that Christian tradition holds is the birthplace of Jesus, since April 2 in the midst of the Israeli offensive in the West Bank against Palestinian militias behind recent terror attacks.

Israeli, Palestinian, U.S. and British negotiators are involved in the talks. Israeli Prime Minister Ariel Sharon's son, Omri Sharon, is representing the Israelis.

Palestinian sources said early Sunday they had complied with an Israeli request to submit a list of names to the Americans of those still inside the church.

The Israelis gave the Palestinians a list of about 40 names of alleged terrorists inside the church who are wanted by Israel, a Palestinian negotiator said.

Sharon in Washington for 'crucial' visit

News of the of the possible progress came as Prime Minister Sharon arrived in Washington ahead of Tuesday's scheduled talks with President Bush.

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Israeli Foreign Ministry spokesman Mark Sofer described Sharon's trip as a "crucial and a serious visit."

"Hopefully we can move away from the violence now and into a political process with the Palestinian leadership, taking the bull by the horns," Sofer said.

Sharon plans to show Bush a report Israeli officials claim contains proof Palestinian Authority President Yasser Arafat and his close aides are linked to terrorist attacks on Israelis.

"We have clear-cut, hard evidence that Arafat and his close aides were involved directly in terrorist activities," said Israeli Cabinet minister Dani Naveh, who showed reporters copies of the 103-page intelligence dossier.

"They authorized the activities, they financed the acts and they were involved directly in planning them."

Chief Palestinian negotiator Saeb Erakat dismissed the report, saying the dossier was full of "forgeries, lies, shams and stunts." (Full story)

Before he left, Sharon said he would present Bush with a "serious plan" for peace in the region.

During the prime minister's visit, Bush is expected to pressure Sharon to start dealing directly with Arafat in the peace process, despite the animosity between them, White House officials said.

Israeli Cabinet minister Dani Naveh shows reporters copies of the 103-page intelligence dossier on Arafat and his aides.

But U.S. Secretary of State Colin Powell and national security adviser Condoleezza Rice said it was not up to the United States to decide who would be at the negotiating table.

"It is up to the Israeli government to determine who they want to negotiate with or not negotiate with, or who they want to sit across the table with or not sit across the table with," Powell told NBC's "Meet the Press."

"We will try to create a set of circumstances where both sides find it in their interest to sit across the table from one another at some level."

Rice told CNN, "We're not going to try to choose who discusses or negotiates for the Palestinian people, and I don't think the Israelis are trying to do that, either."

"Clearly Yasser Arafat is the person ... whom the Palestinian people have chosen to lead them. But he's not leading them very well, and we ought to hold him more accountable for his people and his own failings, and we intend to do that," she said.

Sofer said a key issue during the visit would be a summer international conference of American, United Nations, European and Russian diplomats aimed at resolving the Israeli-Palestinian conflict.

Powell told reporters Sunday the United States would like any plans for Middle East peace to be laid out before that conference so that a consensus could be found.

"We're looking to this meeting sometime this summer as a way of bringing together a variety of ideas about how one might move forward in the political process," Powell said.

In addition to trying to create a better state of security between Israelis and Palestinians, Powell said, the meeting would address economic construction and helping the Palestinian Authority rebuild itself "in a non-corrupt, democratic, accountable way."

Powell also expressed skepticism about an Israeli proposal to build a buffer to physically separate Israel from Palestinian territories. Sharon may discuss the issue as part of a new peace plan he's bringing to Washington.

"I don't know that you're going to solve the problem with a fence unless you solve the underlying problems of the Palestinians feeling that they are disenfranchised, that the occupation continues," he told NBC. "We'll just have to see."

Three killed in West Bank

Israeli soldiers killed a Palestinian woman and her two young children Sunday after a bomb went off under an Israeli army tank. An Israeli soldier was slightly wounded in the blast.

The victims were a 30-year-old woman, a 4-year-old boy and a 3-year-old girl, the Palestine Red Crescent Society said.

The Israeli soldiers said they fired at the three people after seeing suspicious figures in a nearby grove, the military said.

"The [Israel Defense Forces] expresses deep sorrow at the incident and regrets the loss of civilian lives," the military said. The deaths occurred outside an army camp in the northern West Bank, south of Jenin.