In a rare show of unity, Israeli and American Holocaust restitution campaigners yesterday lifted their opposition to delegates being sent to a conference on Holocaust assets. The meeting may mark their last chance to secure compensation for looted Eastern European property.

The Prague Conference on Holocaust Assets - a follow-up meeting to a 1998 conference in Washington due to meet tomorrow - will bring together representatives from 49 countries and dozens of organizations.

"We need to convince Eastern European countries to give back looted property," former under secretary of state Stuart Eizenstat, head of the American delegation to Prague, told Haaretz. "So far their response has not been positive."

Last week, an organization of Holocaust survivors asked U.S. Secretary of State Hillary Clinton to replace Eizenstat as delegate, citing "a conflict of interest."

The Holocaust Survivors Foundation USA said Eizenstat should be replaced because of his position with the Conference on Jewish Material Claims Against Germany - commonly known as the Claims Conference. The organization noted how Israel had replaced its top man to Prague, Reuven Merhav - also a Claims Conference official - with Information and Diaspora Minister Yuli Edelstein.

"The U.S. must follow Israel's example," the foundation told Clinton. Merhav stressed he himself requested the switch to increase the delegation's seniority.

On Sunday, the foundation lifted its objection to Eizenstat's nomination, following talks with him. "I explained to the foundation my record in working for survivor welfare and the limited extent to which I am involved with the Claims Conference," Eizenstat said. "I only attend negotiations with Germany once a year as a Claims Conference delegate."

The Claims Conference, a U.S.-based NGO representing world Jewry in compensation talks with Germany, has been accused of withholding funds from survivors and heirs collected on their behalf, charges currently under review by a Knesset committee of inquiry.

"We will be watching and listening very carefully to what Ambassador Eizenstat will be saying, but we expect to support his leadership of the U.S. delegation in Prague," a foundation source said.

The leadership of the largest organization of survivors and descendants of survivors in the United States, the American Gathering of Jewish Holocaust Survivors and Their Descendants, supports Eizenstat's nomination.

Merhav, a former Mossad and Foreign Ministry official and head of the executive committee of the Claims Conference, has categorically denied the accusations leveled against the Claims Conference. He said "some people sometimes attack" his organization "to vent frustrations." He will represent Israel in Prague as Edelstein's deputy.

The Movement for Quality of Government in Israel also opposed Merhav's nomination as top man in Prague, as did MK Zevulun Orlev and other restitution figures.

One of the key figures who opposed Merhav and Eizenstat's Prague nomination is Martin Stern, a critic of the Claims Conference from Jerusalem who initiated the compensation process for Holocaust-era insurance policies in 1996.

Yesterday Stern said that Israel and the U.S. are represented by "people of stature with vast experience in bilateral agreements. World Jewry looks to them to negotiate for matters which have as of this late point not yet found conclusion." Stern said that he looks forward to seeing an agreement regarding the Carpathian Mountains area.

One of the major challenges facing the U.S., Israeli and U.K. delegations - the latter headed by Lord Greville Janner - at the conference, is to convince Eastern European delegates to give back heirless property that belonged to murdered Jews.

All East European countries have so far resisted restitution for lost heirless property, citing laws that such property should go to their treasuries. "We're urging all countries that took heirless property to use some portion of it to help survivors" Eizenstat said. "Their treasuries should not benefit from the Holocaust."

However, "at this point the response of Eastern European countries has not been positive," Eizenstat said. "It's a hard hill to climb."