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SAN SALVADOR, El Salvador - A new plaza on Jerusalem Avenue was inaugurated Wednesday in honor of the late Palestinian leader Yasser Arafat, despite criticism from the Israeli Embassy in El Salvador.

"We are making a monument to the maximum leader of the struggle for the liberation of Palestine," said one of the promoters, businessman John Nasser, as the square with a large bust of Arafat was inaugurated.

Migrants from Palestine flowed to El Salvador for decades in the late 19th and early 20th centuries and several families became prominent in business and politics. Both President Tony Saca and his rival in last year's election, Schafik Handal, are sons of families that migrated from the Palestinian city of Bethlehem.

Handal, whose Farabundo Marti National Liberation Front governs the capital city, took part in the ceremony. Saca was not present.

"We will struggle from this small country so that Palestine has its own state with its own capital, Jerusalem," Nasser said, referring to Arafat's longtime goal.

The Palestinian leader, who died on Nov. 11, was widely considered a terrorist in Israel, but he managed to create a voice for the widely dispersed Palestinians and gradually led his people into tentative peace accords with the Israelis. Israeli leaders still considered him an obstacle to the peace process when he died.

In February, the Israeli Embassy issued a communique to local newspapers saying that plaza was "a provocation" that was counterproductive for Salvadoran-Israeli relations.