Al Qaeda May Be Moving In On Israel

Several members of Osama bin Laden's al Qaeda network have infiltrated the Gaza Strip and Lebanon and are working with Hezbollah to target Israel, Prime Minister Ariel Sharon said Thursday.

"We have information for some time now that al Qaeda people have entered," he said at a news conference.

"The information says that a small number entered the Gaza Strip. We know they are in Lebanon in close cooperation with Hezbollah. We know they are in the region. There's no doubt that Israel is a target for an attack."

With al Qaeda suspected in the terrorist attacks on Israelis in Kenya last week, CBS News Correspondent Robert Berger reports the U.S. and Israeli have stepped up cooperation in the war on terror.

Israel's Mossad spy agency and the CIA are leading the Kenya investigation. Israeli spokesman Jonathan Peled says cooperation between the two countries is essential.

"It's terror all over the world, and if we don't put an end to it, then we run a danger of it trying to destroy us," he said.

The problem for the U.S. is that close cooperation with Israel could discourage Arab States from cracking down on al Qaeda.

Israel's army chief, Lt. Gen. Moshe Yaalon, warned this week that bin Laden is sending instructions to Palestinian militants in the West Bank and Gaza Strip. He spoke after the twin attacks on Israeli targets in Kenya last week were linked to al Qaeda or its affiliates.

Last February, Israel's then-defense minister, Benjamin Ben-Eliezer, said fleeing al Qaeda members were getting into southern Lebanon and hooking up with Hezbollah. The leader of Hezbollah, Sheik Hassan Nasrallah, dismissed the claims then as "ridiculous."

The Iranian- and Syrian-backed Hezbollah guerrilla group plays a major role in Lebanese politics and has been labeled terrorist by the United States.

Sharon also has offered his strongest endorsement of a U.S.-sponsored framework for peace that ends with creation of a Palestinian state, calling it logical and clever, and promising to push for its approval if re-elected.

However, the hardline Israeli leader rejected a key element of the plan: a detailed timetable.

In a speech to a national security conference Wednesday night, Sharon also reiterated his insistence — shared by Washington — that Yasser Arafat has to be removed as the Palestinian leader and that violence against Israeli targets has to end before progress can be made.

"Israel can no longer be expected to make political concessions until there is proven calm and Palestinian governmental reforms," Sharon said.

But Sharon said that if re-elected next month — as expected — he would try to form a broad-based government that would approve a vision outlined in June by President Bush.

In that speech, Mr. Bush said a Palestinian state could be created alongside Israel within three years.

Sharon's speech is seen aimed at recruiting support on two crucial fronts: Israeli moderates and the Bush administration.

Meanwhile, Arafat has been implicated in a new corruption scandal involving hundreds of millions of dollars, reports Berger.

An Israeli newspaper has disclosed that former Israeli peace negotiators were involved in the illegal transfer of Palestinian funds to Yasser Arafat. One of the negotiators confirmed in a radio interview that $300 million dollars was transferred to Arafat through a secret Swiss bank account. Since then, the money has disappeared. Palestinian officials denied the allegations, saying they're part of an Israeli "smear campaign" against Arafat.

Sharon on Wednesday called President Bush's framework "reasonable, pragmatic and practicable" and said he had accepted it "in principle."

However, he has expressed serious reservations about a more detailed "road map" to Palestinian statehood developed by the so-called Quartet of mediators: the United States, the United Nations, Russia and the European Union.

That three-phase plan envisions a provisional state by 2003 and a permanent one by 2005. It also makes specific demands of Israel, including a complete freeze of Jewish settlement construction.

Arafat has said he accepted the plan in principle, but Israel says each stage should be more strongly linked to developments.

Sharon reiterated his reservations Wednesday, saying he rejected the idea of a "predetermined timetable," insisting movement from one phase to the next would be determined "on the basis of performance."

In the first phase, Israel would "act to lift military pressure, create territorial continuity between Palestinian population centers and ease daily life for the Palestinian population," he said.

After that, a "completely demilitarized" Palestinian state would be established with temporary borders in the areas they are now supposed to control under the accords — about 40 percent of the West Bank and two-thirds of the Gaza Strip. The final phase would determine its final status and fix permanent borders.

"President Bush's sequence will be discussed and approved by the national unity government which I intend to establish after the elections," he said, adding: "I will do my utmost to establish as broad a national unity government as possible."