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Clinton-Assad summit seen as last chance for ME peace

GENEVA, March 26 (Reuters) - U.S. President Bill Clinton and Syrian President Hafez al-Assad summit seen as the last chance to rescue stalled Israeli-Syrian peace talks and prevent renewed violence in the Middle East.

The ailing 69-year-old Syrian leader, who rarely travels abroad, arrived in Geneva on Saturday amid optimism among Arab and European diplomats that he was ready for a breakthrough with Israel. But U.S. officials were more cautious.

"The gaps are not huge, but the path is very difficult," National Security Adviser Sandy Berger quoted Clinton as telling Oman's Sultan Qaboos on Saturday night during a meeting on a stopover in Muscat.

Berger sought to dampen expectations that an immediate renewal of Israeli-Syrian negotiations would be announced after meeting, telling reporters on Air Force One: "I don't think that is a likely outcome."

He said he expected Assad would return to Damascus for consultations and Clinton would talk to Israeli Prime Minister Ehud Barak. Then Syria would decide over the next several weeks whether to return to the negotiating table, an outcome that was "by no means certain", Berger said.

But a Middle Eastern diplomat said: "Assad knows this is his last chance for peace while Clinton is in office, and the best offer he can get from Barak. He would not be coming in his state of health if he didn't want to cut a deal."

Clinton arrived before dawn on Sunday, flying in overnight from Oman after a gruelling trip to South Asia, hoping to burnish his legacy by brokering peace between Israel and its remaining Arab foes in his last year in office.

Berger denied rumours that the president might travel to Israel after the talks, but left open the possibility of him staying on until Monday for more discussions with Assad.

There was no confirmation from the United States. Sources close to the White House said on Friday that barring a last minute hitch, four working groups on border demarcation, security arrangements, water and normalisation of relations would resume meeting within a few days.

The sources said Washington wanted both sides to commit themselves to work non-stop to finalise a draft treaty within 30 to 60 days, which could be initialled at a three-way summit involving Assad, Barak and Clinton.

The Israeli leader needs a first personal contact with the Syrian leader soon to help sell a deal to his divided coalition and to a sceptical electorate in a difficult referendum.

The United States would also be looking to Assad for an assurance, at least in private, that Syria would work to prevent attacks on Israeli troops in southern Lebanon during sensitive final phase of the negotiations, the sources said.

After a four-year freeze, Israeli-Syrian peace negotiations resumed late last year but broke off in January after Syria demanded that Israel commit itself to returning the entire Golan Heights before other issues could be discussed.

Lebanese Hizbollah guerrillas backed by Syria and Iran then carried out a series of deadly attacks on Israeli soldiers and their Lebanese militia allies in south Lebanon, prompting Israel to bomb Lebanese power stations in retaliation.

The violence has since eased, and Barak has acknowledged that previous Israeli prime ministers had indeed pledged to hand back the strategic heights captured in the 1967 war, provided Israel's other concerns were fully satisfied.

An Israeli cabinet decision to withdraw, unilaterally if necessary, from an occupied "security zone" in south Lebanon by July has added to the time pressure for a deal. Lebanese Parliament Speaker Nabih Berri said on Saturday that a unilateral Israeli pullout would not advance peace but would actually be "a step backwards". Diplomats say it would almost certain lead to a new round of cross-border violence.

U.S. diplomats have worked behind the scenes to narrow the differences between Israel and Syria on a draft treaty handed to both sides in January.

Diplomatic sources said a formula proposed by the United States called for Israel to withdraw to a redrawn line close to the boundary on the eve of the 1967 war, with Syria renouncing its right to water from the Sea of Galilee.

The border would run along the northeastern bank of the lake, which provides 40 percent of Israel's water, but the first Syrian border post would be several hundred metres away Israeli and Syrian civilians would have access to the shore.

"Each issue is a double-edged sword," said Berger.

"They both have to compromise, but they both have to believe they are stronger and better positioned as a result of reaching a peace agreement. Whether or not that is achievable or do-able I think is still unclear," Berger said.-Reuters