Israel, PLO Move Closer to Accord : Mideast: Arafat says another week is needed to complete drafting of agreement on Palestinian self-rule. Both sides indicate extensive compromises were offered.

DAVOS, Switzerland —  Israel and the Palestine Liberation Organization came close to an agreement Sunday that would have cleared the way for implementation of their accord on Palestinian self-government, but they found that two days of intensive negotiations were not enough to resolve the complex issues involved.

PLO Chairman Yasser Arafat, with Israeli Foreign Minister Shimon Peres at his side, said at least another week would be needed to reach compromises on a number of issues and to complete drafting of the agreement.

“Many principles have been agreed upon,” Arafat said after emerging from eight hours of talks with Peres late Sunday. “We are now looking to the drafting . . . but (these agreements) have to be drafted accurately to ensure the accord is implemented precisely.

“At this point, it is better not to hurry.”

Although Israeli and PLO officials declined to disclose details of the negotiations, they indicated that both sides made extensive compromises on control of the entry points into the Gaza Strip and the Jericho District in the West Bank after Palestinians establish their administration there, among other issues.

But Peres, pressed to further explain the points of disagreement, replied simply, “The drafting.”

Both sides were disappointed because they had believed earlier in the day that they were within reach of a broad, if still tentative, agreement on the major issues that have held up implementation of the accord for the last two months.

Arafat, again with Peres at his side, had announced, in fact, that he would meet with Israeli Prime Minister Yitzhak Rabin this week in Cairo to sign the agreement, which would be the next major step toward peace in the Middle East.

But the negotiators failed, despite their late evening talks and the mediation of Egyptian Foreign Minister Amir Moussa, to agree on a package of measures that could be presented to Rabin and the PLO leadership for approval.

“This is natural and not a surprise,” Yasser Abed-Rabbo, a member of the PLO Executive Committee, said after the two delegations broke off talks at midnight. “Some of the problems are in the details, and some are in the substance. Above all, however, is a mutual desire for a very clear agreement, a very explicit agreement, because we want to avoid problems in carrying it out.”

Uri Savir, director general of Israel’s Foreign Ministry, went further, describing the negotiating session here as “the best meeting yet” in the current series of talks on implementing the autonomy accord, which was signed in September.

But he too said neither side had realized how difficult it would be to settle the details of the new agreement once the basic principles had been resolved.

A major problem was Peres’ limited authority, according to PLO officials.

Although Arafat was ready to commit the PLO to measures agreed by the negotiators, Peres said he would have to take them back to Rabin, who found himself preoccupied Sunday by a bitter parliamentary debate on Israeli health care reforms and unable to focus on the negotiations.

Peres acknowledged his need to consult Rabin but promised answers when he meets Arafat in Cairo, probably next Sunday.

Arafat had raised expectations of a major breakthrough in the long-stalemated talks when he told the World Economic Forum, an annual gathering of political and business leaders here, that he and Peres had virtually resolved the issues that have delayed the withdrawal of Israeli troops from the Gaza Strip and the Jericho District.

Officials on both sides cited major compromises on the issue of border controls.

Israel has insisted on maintaining total control over entry and exit from the two areas to prevent the return of hundreds of thousands of Palestinian refugees, to ensure that arms are not smuggled in and to underline that the regions are not, in fact, independent.

The PLO has sought to minimize the Israeli security controls, particularly Israeli searches of entering Palestinians, and to heighten its own presence through the deployment of Palestinian police officers, Palestinian flags and other symbols of statehood.

The negotiations Sunday also addressed questions about the borders of the Jericho District, according to Israeli and PLO sources, and about the protection of Jewish settlers, now numbering about 5,000, who will remain in the Gaza Strip after the autonomy accord takes effect.

Clearly pleased that the lengthy impasse in the negotiations appeared to be almost over and that implementation of the autonomy accord would soon begin, Arafat thanked Peres profusely for “his positive stance” in the talks here and a week earlier in Oslo.

Peres replied with praise for Arafat for “his supreme effort to bring our peoples together in peace and hope.”

In their search for an agreement after weeks of frustrated negotiations, the delegations had put new and modified proposals on the table, enlarging what had been almost agreed upon in Oslo and earlier in Cairo until they had what one participant described as “a package worth the price.”

Peres, addressing the World Economic Forum, said the negotiations have not been easy for either side.

For its part, however, Israel is determined “to make the Palestinian story a story of success, a story of good neighborliness, a story of hope for coming generations,” Peres said.

Arafat and Peres, who had mounted the stage hand-in-hand, both appealed for international support, economic as well as political, to ensure the success of the autonomy accord, signed in September.

Replying to a question, Arafat said that extremist groups opposed to compromises he has made in the negotiations with Israel will probably try to undermine the accord’s implementation.

“These fanatic groups will increase in this atmosphere of instability, poverty and injustice,” Arafat said, saying they will be countered by “justice, justice, justice for all of us--and at the same time, a very strong economic base. . . .”

“Either we can have another Somalia,” he said, noting that 58% unemployment in the Gaza Strip feeds the unrest there, “or we can have another Singapore . . . with the high skills and level of education that we have.”

Peres urged Western governments to provide investment guarantees for their companies to undertake projects in the Gaza Strip and West Bank.

“If you can help us make the Middle East prosperous,” he told the business leaders, “peace will endure.”

Meanwhile, the absence of peace continued to fuel violence in impoverished Gaza on Sunday.

A Jewish settler was shot and seriously wounded on a road leading to Gush Qatif, the largest group of Jewish settlements in the region and the target of frequent attacks by armed Palestinian groups opposed to the peace agreement.

The Islamic fundamentalist group Hamas, which has vowed to fight the accord, distributed leaflets taking responsibility for the incident.

Elsewhere in Gaza, the armed wing of Arafat’s own Fatah group claimed responsibility Sunday for wounding three Israeli soldiers in a grenade attack on an army patrol in Rafah.

That attack broke a cease-fire between Fatah and the Israeli army, begun after the peace agreement was signed. Many of Arafat’s armed Fatah Hawks in the Gaza Strip say they will continue to attack the army as long as Israeli forces continue to arrest and imprison them.

Times staff writer Mark Fineman in Jerusalem contributed to this report.