Foreign Minister Shalom and Iraqi PM Shake Hands at UN

In wake of Bush's UN speech, FM Shalom says Israel won't enlarge settlements; Bush urges end to Israel's 'humiliation' of Palestinians.

UNITED NATIONS - Iraqi Prime Minister Iyad Allawi and Foreign Minister Silvan Shalom had a brief encounter on Tuesday when the alphabet brought the two together at the UN General Assembly.

With their delegations seated side by side because of the alphabetical ordering, Shalom and Allawi shook hands and the Israeli minister said he told the Iraqi leader that he hoped for peace in the Middle East.

Shalom told reporters it was the first official contact between an Israeli and an Iraqi official since the Iraq war and he said U.S. officials told Israel more than a year ago it was conceivable the two might some day sign a peace agreement.

"The Americans ... told us that they don't see any reason why in the future we won't have a peace treaty between us and the Iraqis," Shalom told reporters. "It's not so easy, it's an Arab country and they are under pressure."

Shalom assures U.S. Israel won't enlarge settlementsShalom assured the Bush administration Tuesday that Israel would not build or enlarge any settlements and that it would remove some two dozen West Bank outposts. The commitments came shortly after U.S. President George W. Bush called on Israel to impose a settlement freeze, dismantle unauthorized outposts and "end the daily humiliation of the Palestinian people."

However, Shalom did not promise an end to the "natural growth" of settlements, saying "no one can blame us" for adding schools and other buildings as families grow larger.

In a speech to the United Nations General Assembly on Tuesday, Bush issued a direct challenge to Prime Minister Ariel Sharon while also calling on Palestinians to adopt peaceful means to achieve the rights of their people.

"Israel should impose a settlement freeze, dismantle unauthorized outposts, end the daily humiliation of the Palestinian people, and avoid any actions that prejudice final negotiations," Bush said. "And world leaders should withdraw all favor and support from any Palestinian ruler who fails his people and betrays their cause."

Bush also said a "commitment to democratic reform is essential to resolving the Arab-Israeli conflict." Hinting at Palestinian Authority Chairman Yasser Arafat, the president said: "Peace will not be achieved by Palestinian rulers who intimidate opposition, tolerate corruption, and maintain ties to terrorist groups. The long-suffering Palestinian people deserve better. They deserve true leaders capable of creating and governing a free and peaceful Palestinian state."

Israeli government sources said Bush's comments did not signal any rift between Israel and the United States, and Shalom promised Israel would meet Bush's demands on settlements and outposts.

The foreign minister said Israel would remove some two dozen remaining illegal West Bank outposts. "Our obligations in this matter will be implemented," Shalom said in an Israel Radio interview after Bush's speech.

Shalom told U.S. Secretary of State Colin Powell that Israel has already dismantled 80 illegal outposts, according to a senior member of the foreign minister's delegation to the U.S.

"We are committed not to build more settlements, not to extend or enlarge them," Shalom said after his 40-minute meeting with Powell in New York.

When asked about natural growth, however, Shalom told reporters the Israeli government was approving construction of new schools, health centers and other buildings where necessary.

"No one can blame us for that," Shalom said. "You can't force young people that are getting married out of their village or out of their settlement. It can't be."

"When you talk about construction in general, Israel does not build new settlements in the West Bank or in Gaza," an Israeli source said. "It adheres to the understanding where the only building that takes place is within the built-up area, to cater for current needs of each of the communities."

Nonetheless, Palestinian cabinet minister Saeb Erekat said Bush should find a way to make Israel comply with the settlement freeze.

"We urge President Bush to put [into motion] the mechanism with the UN and other members of the Quartet to make the Israeli government comply once and for all with the settlement freeze," Erekat said.

A senior Bush administration official discussed the complications of what a "freeze" entails, saying U.S. and Israeli officials have had detailed talks on "technical and practical" issues of such building and hinting some natural growth might be acceptable.

"When is a freeze not a freeze, when is it a freeze? In the real world it is a very complicated question," he said.

FM: Nothing new about Bush speechShalom downplayed the comments Bush directed toward Israel, saying the speech as a whole sent the "very firm message" that the world must fight terror and bring democracy to the Mideast.

"There was nothing new about it [the speech]," Shalom said.

Bush's address to the UN conveyed that "the United States thinks the entire world must unite under one joint goal - and that is fighting terrorism on the one hand, and on the other hand providing democracy and liberty to the entire Middle East region," Shalom told Israel Radio. "Both these things together will bring stability to the Middle East and to the entire world."

Bush appeared determined that the U.S.-backed road map to peace is still a viable option. "Those who would lead a new Palestinian state should adopt peaceful means to achieve the rights of their people, and create the reformed institutions of a stable democracy," he said.

He also called on the Arab world to normalize ties with Israel. "Arab states should end incitement in their own media, cut off public and private funding for terrorism, and establish normal relations with Israel."