The United States believes it can indict captured Palestinian leader Mohammed Abbas (better known as Abul Abbas) for murder, and that his immunity under the Oslo Accords applies only in Israel and the PA, not in the U.S.

Although no legal steps have been started to charge Abul Abbas, U.S. administration sources say this is expected to be done as he is responsible for a terrorist act - the hijacking of the Achille Lauro cruise ship - during which an American citizen, Leon Klinghoffer, was murdered.

The Americans are also debating how to treat a request to extradite Abul Abbas to Italy to where he has been tried in absentia, convicted and sentenced to life in prison. Italian Justice Minister Roberto Castelli said he would seek extradition.

Italian Justice Ministry officials met American counterparts yesterday for a two-hour meeting described as preliminary, and said more would follow. The meetings are clear up legal questions on Abbas' status and decide from which country Italy should seek extradition.

Castelli said yesterday that "whatever decision is made by the two countries, it will be made in full accord, without opening a confrontation."

In 1985 members of the PLF (Palestine Liberation Front) headed by Abul Abbas, hijacked the Italian Achille Lauro and murdered Klinghoffer, an elderly, disabled Jewish American in a wheelchair, and threw his body overboard. Charges were pressed against Abul Abbas in the U.S. for kidnapping, piracy and murder, but the charge sheet expired.

Under the Oslo agreement between Israel and the PA, members of the PLO were granted immunity from acts committed before the 1993 peace accords. Palestinian minister Saeb Erekat has demanded that the Americans free Abul Abbas. PA sources insist he has immunity under the accords, which also stipulated that people involved in past terrorism would not be indicted if they renounced terrorism and joined the peace process. Abul Abbas publicly renounced terrorism in 1996 and Israel allowed him to enter the PA for Palestine National Council meetings.

But a State Department official said "the 1995 interim agreement concerns arrangements between Israel and the PA for the detention and prosecution of certain persons. It does not apply to the legal status of persons detained in a third country." In addition, they said that since Abul Abbas was responsible for the murder of an American citizen, the U.S. anyway has legal rights in his regard.

The American military have linked Abul Abbas to Saddam Hussein's support for terrorism. However, American reports in the last few years do not mention any terrorist activity carried out by the PLF or by Abul Abbas himself, and do not mention any Iraqi aid for PLF activities, apart from giving asylum to its commander.

In the past Abul Abbas was also linked to Osama Bin Laden's Al Qaida, but no proof of this was ever produced and Abul Abbas dismissed such claims.

The Damascus-based PFLP (Popular Front for the Liberation of Palestine), which does not recognize the Oslo agreement, yesterday condemned Abul Abbas's arrest as "an act of terror" and demanded his release. "The U.S... is terrorizing Arabs and imposing its will on them," said PFLP spokesman Abou Sami.

Hamas founder Sheikh Ahmed Yassin said Abul Abbas's arrest suggested U.S. forces were now targeting leaders of the Palestinian uprising. "It shows America is sinking its sharp teeth into Iraq and into Palestine," said Yassin. "It is a Crusader war against both. But it will be defeated. Our people are stronger than Israel and America."