U.S.: Arafat Is Israel's Negotiating Partner

The United States stressed that it wants to see a Palestinian state with Yasser Arafat as its probable leader, forestalling an Israeli move even before Israeli Prime Minister Ariel Sharon visits Washington this week.

But at the same time, the Bush administration said it expects a radical overhaul of Palestinian governance to end rampant corruption and ties to terrorism.

For his visit with Bush Tuesday, Sharon is bringing with him nearly 100 pages of documents for U.S. review that he says show Arafat was linked to the terror attacks that led to an unprecedented Israeli offensive in the West Bank. Israeli officials say Arafat's alleged involvement in terror plotting counts him out as a peace partner.

"We need to be able to keep talking, but with another Palestinian leadership," said Israeli Education Minister Limor Livnat, who was accompanying Sharon to the United States.

Palestinians dismiss the documents as forgeries.

The visit will be the fifth between Sharon and Bush since the president took office, and will almost certainly see Sharon stressing his belief that Arafat is "irrelevant" and a terrorist.

But U.S. officials said Arafat — who has yet to meet with Bush — still represents the Palestinians.

"It serves us all better if we continue to work with all Palestinian leaders and to recognize who the Palestinian people look to as their leader," Secretary of State Colin Powell told ABC's This Week.

Condoleezza Rice, Bush's national security adviser, concurred.

"The White House position is that we're not going to try to choose the leadership for the Palestinian people. Chairman Arafat is there," she said. 

Even leaders of Congress, which overwhelmingly condemned Arafat and supported Israel in nonbinding votes last week, acknowledged that Bush had no one else to turn to.

"At this point Yasser Arafat is the best of what's probably not a particularly strong field. And in that regard, I would support the president," Sen Bob Graham, D-Fla., said on Fox News Sunday.

Bush has envisioned a two-state solution, and both Powell and Rice both spoke in those terms.

"Do you go to an interim state, a provisional state?" Powell said on NBC's Meet the Press, speaking of possible prospects for peace. "Or do you just have phases that go to the final state solution that we're looking for?"

Sharon is under pressure from hawks in his government who seek to return Israel to a position of rejecting Palestinian statehood

Rice said the Bush administration "will talk to the Israelis about what makes sense for Israeli security and for the establishment of a Palestinian state down the road."

They made it clear that Arafat, too, must move decisively on reforms.

"We can talk about reconstitution of the Palestinian Authority in a noncorrupt, more responsive and more democratic way, a transparent organization rebuilding its infrastructure and security apparatus," Powell said.

The administration is expecting "new behavior in the war on terrorism, and we are bringing new factors to bear on Chairman Arafat," Rice said.

The offensive and Palestinian resistance have seen support for both Mideast leaders soar among their peoples, and Powell said that could provide a platform for peace initiatives, including his announcement last week of an international conference this summer.

Powell and Rice said they expected Arab nations to take a more central role in bringing peace to the region.

The Clinton administration blamed Arab fence-sitting in part for the collapse of the 2000 peace talks. Bush warmly welcomed the recent Arab League initiative — led by Saudi Arabia — to normalize relations with Israel in exchange for its relinquishing lands it captured in the 1967 Mideast War.

Dovish Israeli leaders have been ready to return most of those lands, but Sharon insist on retaining at least part of the areas, citing security and historical claims.

Powell suggested that was unrealistic.

"They said we should start from the premise we'll have to get back to the '67 borders," Powell said. "So we're going to have to discuss this issue."

Rice and Powell differed in tone on Jewish settlements in Palestinian areas, with Powell suggesting that stemming their growth was a priority.

"Something has to be done about the problem of the settlements, the settlements continue to grow and continue to expand," Powell said. "It's not going to go away."

Rice said other issues — including extinguishing terror — were higher on the agenda.

"Let's take one thing at a time," Rice said. "Settlements will eventually be an issue. But I think we have to get the context right here. We need to end the terror, create a situation in which there is better security and no violence."

The differences reflect administration divisions between those who favor the Israel's tough actions and those, including Powell, who are more solicitous of Arab demands.

Mideast diplomacy continues Wednesday when King Abdullah II of Jordan comes to the White House. The king was to see Powell, Vice President Dick Cheney and Secretary of Defense Donald H. Rumsfeld on Monday.

The Associated Press contributed to this report.