Uphill Battle for Second Day of Arab Summit

B E I R U T, Lebanon, March 27, 2002 -- The Middle East is reeling from waves of disappointment as it faces the second day of the Jewish Passover holiday and the second day of an Arab League summit that was billed as a potential solution to the region's woes.

Instead, Israeli families mourn the at least 19 killed and hundreds more wounded in a suicide bombing at a resort hotel in the Israeli coastal city of Netanya. The attack took place as diners at the hotel held a Passover seder.

And in Beirut, Lebanon, Arab leaders struggle to recover from the breakdown of order at their meeting.

Palestinian officials at the summit walked out in protest Wednesday over what they called the blocking of a speech by Palestinian Leader Yasser Arafat that was to be relayed via satellite.

Saudi Crown Prince Abdullah unveiled his widely anticipated Middle East peace proposal at the meeting, but the proposal was overshadowed by the bombing, the walkout, and the absence of three key figures in the peace process: Palestinian leader Yasser Arafat, Egyptian President Hosni Mubarak and Jordan's King Abdullah.

How Should Arafat Speak?

Arafat said he would not attend the meeting after Israeli Prime Minister Ariel Sharon said the Palestinian leader may not be allowed to return home when the summit ended. Instead, Arafat planned to address the meeting via satellite — a televised speech that Lebanese officials blocked on Wednesday because Arafat wanted to do it live.

The Lebanese decision prompted the Palestinian delegation to leave the summit in protest. But Lebanese officials said the disruption was caused by a "misunderstanding" as they feared an Israelis might interfere with the live transmission line.

Lebanese Prime Minister Rafik Hariri said a taped version of Arafat's speech would be aired on Thursday. Palestinian officials are expected to return to the summit.

Arafat went ahead with the speech, which was broadcast on Al-Jazeera.

"In the name of the Palestinian people and the Palestinian leadership, I would assert here our welcome of the courageous initiative which was declared by Crown Prince Abdullah regarding a peaceful solution to the Palestinian-Israeli conflict," he said in his speech.

"This initiative, God willing, will turn this summit into an Arab initiative for the peace of the brave between us and the Israeli people and Jews in the world."

Saudi Proposal Unveiled

Crown Prince Abdullah's peace proposal was expected to be the center of attention at the Arab League summit. In its formal unveiling Wednesday, he proposed that the Arab League offer Israel "normal relations" in exchange for recognition of a Palestinian state with East Jerusalem as its capital and of Palestinian refugees' right to return.

Detailing a plan he floated last month, Crown Prince Abdullah said the Arab world would offer Israel normal relations if Israel pulled out of all Arab land it occupied in 1967.

"Land for peace has been the principal adopted by the international community," he said. "Full Israeli withdrawal from occupied territories is the basis for everything."

Crown Prince Abdullah made the offer despite some Arab criticism that an offer of normalized relations with Israel gave the Jewish state too much too soon.

Speaking to reporters in Greenville, S.C., President Bush praised the Saudi proposal, calling it "a positive step forward to bringing peace to the region."

Even before the bombing though, Israel was nonchalant about the offer, saying it was too vague, and refusing Palestinian refugees' right to return. Officials also noted a difference in Abdullah's language in the current proposal and what he floated in February.

They said he originally used the term "full normalization," and that they viewed the current language as something less.

There have been concerns that even if the delegates at the summit endorsed the Saudi proposal, it would have little weight without the presence of the three key Arab leaders.

Summit Opens Without Key Players

Jordanian Prime Minister Ali Abul-Ragheb opened the summit with a speech saying his country supported the Saudi peace initiative, and that Jordan considered it "a principle foundation for achieving comprehensive peace."

But the absence of the Jordanian monarch, who — following Mubarak and Arafat's lead — canceled his participation just hours before the summit opened, was keenly felt.

Jordanian officials cited security reasons for King Abdullah's absence, but at the summit, there was speculation that political reasons also played a role in the decision.

But Mubarak, in his first public comment since he bowed out of the Arab League meeting, told reporters in Cairo he had decided not to attend the summit in a show of solidarity with Arafat.

Mubarak said he had been keen on attending the summit, but he decided to stay away, "when I found the issue becoming a matter of blackmail of the Palestinian people and the head of the Palestinian Authority, insult and humiliation."

The Egyptian leader also said he had advised Arafat not to attend the summit in Beirut since Israel was treating Arafat like a "schoolboy."

"Let's imagine how the situation would have been with the Palestinian Authority leader and all the Arab leaders attending and he [Arafat] would not be allowed to go back, with the summit's attention all on the Saudi initiative and suddenly shifting to howto get Arafat back to his land," he said.

Although there was speculation that the leaders of Egypt and Jordan — the two key Arab allies of the United States — were disappointed with Washington's inability to put pressure on the Israelis, Mubarak refused to publicly criticize the United States.

Another Violent Day

The need for a comprehensive resolution to the Middle East crisis was highlighted by the devastating explosion in Netanya.

The suspected suicide attack took place on the first night of Passover, when many families go out to hotels to dine. The Islamic militant group Hamas claimed responsibility for the attack.

Overnight, the Israeli army said it shot dead two Palestinian gunmen who tried to infiltrate a kibbutz in Gaza.

In a separate incident, Palestinian hospital officials said four Palestinians were wounded in an exchange of gunfire at Rafah, in the southern Gaza strip.

On Tuesday, two unarmed observers, a Swiss woman and a Turkish man, were shot and killed near the volatile divided city of Hebron, in what Israeli police called an attack by Palestinians. A third observer was lightly wounded.

ABCNEWS' Gillian Findlay and Clark Bentson in Beirut, Lebanon, contributed to this report.