Israelis And Palestinians Meet But...

Israeli Foreign Minister Shimon Peres met Monday with Palestinian Finance Minister Salam Fayed, the first face-to-face contacts on that level in months, officials on both sides said.

Israeli officials said Prime Minister Ariel Sharon gave the go-ahead for the meeting between Peres and Faiad on condition the talks did not touch on peace issues.

The officials said the discussions with Faiad and talks later in the week with Palestinian Interior Minister Abdel-Razak al-Yehiyeh would focus on easing conditions for Palestinians under Israeli reoccupation in seven West Bank cities.

Yoram Dori, a spokesman for Peres, said the meeting lasted about one and a half hours and covered economic issues. Palestinian officials, speaking on condition of anonymity, said the meeting was in a hotel in west Jerusalem, the Jewish side of the city.

The meeting took place during one of the longest stretches without an Israeli fatality since fighting broke out between Israel and the Palestinians in September 2000. However, Israel continues to arrest would-be attackers and has taken control of seven of eight major West Bank cities and towns, enforcing curfews and hunting down militants.

On Monday, during a break in the curfew in the West Bank town of Qalqiliya, several thousand Palestinians attended the funeral of 9-year-old Shukri Daoud, who died after suffering critical head injuries on June 27, when Israeli soldiers fired on Palestinians who had violated the curfew.

Daoud's body, his head still wrapped in white bandages, was carried through the streets of Qalqilya on a stretcher amid shouts of "Allahu Akbar!" or "God is great."

Israel admitted its forces "acted improperly" in firing on Daoud and two other children who were also injured that day. The shooting heightened Palestinian frustration with the takeover of the main population centers, which Israel says is necessary to prevent attacks.

During 21 months of Palestinian-Israeli violence, high-level meetings between the two sides have been rare. Peres, who represents the dovish Labor Party in Sharon's broad-based coalition government, has pressed for contacts despite the fighting, but Sharon, who heads the hawkish Likud, has insisted that there can be no negotiations until Palestinian terror attacks stop.

However, after Palestinian leader Yasser Arafat reshuffled his Cabinet a month ago, Peres pressed for and received permission to talk with some of the five new ministers Arafat appointed, including Fayed and Interior Minister Abdel Razak Yehiyeh.

Palestinian Cabinet Secretary Ahmed Abdel Rahman said the meeting wouldn't accomplish anything and represented another attempt by Israel to change the Palestinian leadership by meeting only with newly appointed ministers.

Palestinians said ministers from the two governments last met in March, before a series of Palestinian suicide bombings led to a major Israeli invasion of the West Bank that lasted six weeks. The Israeli Foreign Ministry said it did not know the last time Cabinet ministers held face-to-face talks.

Israel's army launched its latest incursion into Palestinian cities after attacks that killed 31 Israeli civilians from June 18-20. Since then, more than 30 Palestinians have been killed, but no Israelis.

The Palestinian leadership has demanded Israeli forces leave the West Bank cities, but Israeli officials have said their occupation is open-ended.

One senior security official said Sunday that Israeli forces could remain in Palestinian areas for up to one year, until Israel finishes fencing off the West Bank from Israel. When asked about the time frame, Sharon spokesman Raanan Gissin said Israeli security services had determined that occupying Palestinian areas was necessary to end attacks.

"If you sit inside the cities, you can reduce the number of bomb belts that get out to the (suicide bombers), until you have a buffer," he said.

In a separate development, diplomats at the United Nations said top U.N., U.S, European Union and Russian officials would meet in New York next week to discuss efforts to end the 21-month-old conflict.

The meeting starts July 15 with Secretary-General Kofi Annan, U.S. Secretary of State Colin Powell, and senior EU and Russian officials. They will be joined the following day by officials from Saudi Arabia, Egypt and Jordan, the diplomats said.