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Tuesday, August 12, 1997 - Page updated at 12:00 AM

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Israel Lifts Some Sanctions On Palestinians

AP

RAMALLAH, West Bank - Israel agreed today to lift some economic punishments imposed on Palestinians in the West Bank and Gaza Strip, while angry Palestinians burned an effigy of the U.S. envoy who is pressing the two sides to work together on security issues.

Protesters in the West Bank town of Nablus burned an American flag and an effigy of President Clinton's envoy, Dennis Ross.

A group of Hamas supporters among the 5,000 marchers chanted "give us car bombs" while members of Arafat's Fatah faction paraded with AK-47 Kalashnikov assault rifles.

Thousands of Palestinians also rallied yesterday in Ramallah, where Palestinian leader Yasser Arafat met Ross, and in Gaza City.

Later, Israel announced it was easing restrictions on Palestinian agricultural goods leaving the Gaza Strip. Three trucks with eggplants and tomatoes were allowed to leave.

Israel banned Palestinians from entering the country after a July 30 double-suicide bombing claimed 16 lives in an open-air Jerusalem market. A ban on travel between some Palestinian towns in the West Bank is still in force, and Israel has refused to transfer millions of dollars in tax revenues to the Palestinians.

Atef Alawneh, Palestinian deputy finance minister, said the cutoff in taxes collected from Palestinians by Israel amounted to $40 million, about 60 percent of the Palestinian Authority's monthly income.

"The situation is very dangerous, and we are on the verge of

collapse. We have no money," said Alawneh.

David Bar-Illan, a top aide to Prime Minister Benjamin Netanyahu, said Israel refused to hand over the tax money, which he estimated at $22 million, because some senior police had been involved in planning attacks on Israel.

Israel has demanded the trial of Palestinian Police Commissioner Ghazi Jabali after claiming he was involved in sending a squad of police to ambush Israelis in the West Bank.

Palestinian officials indicated it was premature to say whether Ross would be able to break the impasse.

"(Ross) came to deal with security issues," said Saeb Erekat, the chief Palestinian negotiator. "And we told him that the Palestinian security is as important as Israeli security."

Security cooperation between Israel and the Palestinians has been suspended since March when Israel started a Jewish housing project on disputed land in Jerusalem.

Shin Bet security-agency chief Ami Ayalon met with Palestinian intelligence chief Amin al-Hindi and security chiefs from the West Bank and Gaza yesterday.

Copyright (c) 1997 Seattle Times Company, All Rights Reserved.

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