Egypt says Arab peace plan is basis for talks

By Alaa Shahine and Arshad Mohammed

ASWAN, Egypt (Reuters) - Egypt said on Sunday Arab states were ready to negotiate with Israel if the Jewish state accepts their 2002 peace initiative as a starting point.

But Arab states will not amend their initiative, which Israel says it finds problematic, before Israel makes the first move, Foreign Minister Ahmed Aboul Gheit told a news conference.

The initiative offers Israel normal relations with all Arab states in return for withdrawal from land captured in 1967 and a solution for Palestinian refugees. Israel has repeatedly rejected the plan but has recently shown some interest.

U.S. Secretary of State Condoleezza Rice is touring the Middle East and trying to persuade Arab governments to make the plan more attractive to Israel by adding what she calls "active diplomacy" -- seen as code for early contacts with Israelis.

Arab governments say they have no plans to amend the plan at their summit meeting in the Saudi capital Riyadh this week but Aboul Gheit indicated some flexibility.

"The initiative is a tool for starting negotiations. It is offered for the Israeli party to take and deal with it so that we can set off in negotiations," he said.

"Of course the Arab side cannot make a proposal then amend it before taking up the matter with the other party. We are waiting for the Israeli side," he added.

Rice, speaking at the same news conference, said the United States was not asking the Arabs to change their proposal but Arab states should do everything in their power to help bring about a peace agreement between Israel and the Palestinians.

NEW DRIVE?

"I have not suggested amendment of the Arab initiative... What I have said is that I hope there will be a way to make it the basis for active diplomacy," she said.

On Saturday Rice had talks in Aswan with the foreign ministers of four Arab governments friendly with the United States to promote what she is billing as a new U.S. drive for peace between Israel and the Palestinians.

But after years of relative inactivity and in the absence of any specific U.S. proposals, analysts say they remain skeptical that the Bush administration intends to do more than give the impression that it is working for peace.

Rice said: "That (the Arab initiative) is a useful step and we talked about how the Arab-Israeli side of this may indeed help to promote ... the establishment of a Palestinian state."

"I would hope that every state will search very deep to see what it can do at this crucial time," she added.

But she offered no new ideas on what Arab governments could do to help and did not propose directly that more Arab countries start talks with Israel.