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Foreign Minister Silvan Shalom said yesterday that "if Syria changes its policy and stops providing shelter for terror organizations and for the transfer of weapons and ammunition from Iran to Hezbollah, we can renew negotiations with it."

Shalom was responding to Syrian President Bashar Assad's statement on his willingness to negotiate with Israel, in his appearance before the Knesset Foreign Affairs and Defense Committee.

He said that Syria is under heavy international pressure to remove its forces from Lebanon and cease sheltering terror and the Hamas headquarters in Damascus.

United Nations special envoy Terje-Roed Larsen said yesterday that Syria was "genuinely" interested in resuming peace talks with Israel, and urged both sides to explore ways to return to the negotiating table.

Speaking on a variety of topics, Shalom also said that an effort is currently under way to recruit figures active in the American Jewish community to help financially support Israeli public relations operations overseas. He remonstrated against the Foreign Ministry's limited information budget for overseas, complaining that the information budget amounts to just $8 million, whereas an Israeli factory like Strauss allocates around $20 million annually for advertisement.

Shalom devoted much of his time before the committee to Iran. He said that all reports indicate that Iran is continuing its efforts to manufacture nuclear weapons, and it is felt that Iran will try to take advantage of the U.S. election campaign - when the administration's gaze is focused on solving internal problems - to continue full steam ahead in its nuclear endeavor. According to Shalom, Germany, Britain, and France are working to block Iran's nuclear activity.

On the matter of the Palestinian Authority, Shalom said that the Ahmed Qureia government is characterized by complete inaction save for the demand that the conflict with Israel be internationalized.

Shalom repeated his claim that Yasser Arafat be expelled, and directed criticism at EU officials who try to seek avenues of approach to Arafat.