Progress Reported at Mideast Summit - Sources

Middle East summit talks at Camp David have made progress and a framework agreement for a final Israeli-Palestinian peace could be reached within a few days, sources close to the talks said on Saturday night.

The sources reported a mood of growing optimism among Palestinian President Yasser Arafat's team, which has been the most pessimistic in public since US President Bill Clinton called the five-day-old summit.

"They are working on an agreement that could be finalised within a few days. The main problem now is refugees, and a bit on Jerusalem," one source said.

The United States has maintained a strict news blackout on the substance of the talks. An Israeli delegation source earlier described the talks as "very difficult" and said there had been no breakthrough. Prime Minister Ehud Barak's spokesman, Gadi Baltiansky, said Barak was prepared to stay two weeks if necessary to get a deal.

The sources ascribed the mood change among the Palestinians to progress on the ultra-sensitive issue of Jerusalem, which both sides want as their capital. They gave no details but Israeli parliament speaker Avraham Burg this week talked of both "enlarging and shrinking" Jerusalem - bringing some Israeli settlements close to the city within its boundaries, and putting some existing Palestinian neighbourhoods outside a redrawn area under Israeli control.



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