Aide says Arafat turned down $30 billion U.S. resettlement aid offer

GAZA CITY, Gaza Strip - Palestinian leader Yasser Arafat turned down an American plan to set up a $30 billion international fund to resettle refugees, a top Palestinian official said Thursday.

Salim Zanoun, chairman of the PLO Central Council, said the offer came during last month's summit at the Camp David presidential retreat outside Washington. He said it was part of American pressure on Arafat to compromise on the refugee issue.

The Palestinians are demanding that millions of refugees be allowed to return to their former homes in what is now Israel.

Rejecting the offer, Arafat ''told the Americans that the issue of refugees is non-negotiable,'' Zanoun told The Associated Press.

Israel is willing to allow a few thousand Palestinian refugees to be reunited with their families in Israel. The others would settle in a Palestinian state or in countries where they now live.

Palestinians fled during the 1948 war that followed Israel's creation. They were confined to refugee camps in Egypt, Jordan, Syria and Lebanon, where many still live with their descendants. Some of the camps came under Israeli control in 1967, when Israel captured the West Bank and Gaza Strip.

Zanoun also said that the Central Council, the PLO's ruling body, will convene a week before the Sept. 13 deadline for a peace treaty with Israel to set the date for declaring Palestinian independence.

Arafat has given conflicting signals on whether he will proclaim statehood on Sept. 13, even without Israel's blessing, or delay such a move if a peace agreement has not been reached by then.

During a tour of Europe and the Arab world following the Mideast summit at Camp David, Arafat did not win unanimous backing for a unilateral statehood declaration, Zanoun said.

''Some countries told him (Arafat) that they will support the declaration on Sept. 13, such as Egypt and Saudi Arabia,'' Zanoun told a news conference in Gaza City. ''Some countries asked him to give more time to peace talks and resume negotiations before any declaration.''

Zanoun said the 129-member Central Council would convene in the first week of September, but did not give an exact date. In its previous session in early July, the council told the Palestinians to prepare for statehood by Sept. 13, but the wording of the decision was vague enough to allow for an extension.

By the first week of September, it will be clearer whether a peace treaty can be reached.

Israeli Prime Minister Ehud Barak and the chief Palestinian negotiator, Ahmed Qureia, said Wednesday that prospects for another Mideast summit were dim. Qureia said the gaps remain wide on all issues, including borders of the Palestinian state, the status of Jerusalem and the fate of Palestinian refugees.