Prime Minister Ariel Sharon's office this morning labeled recent Israeli media reports of an imminent interim agreement with the Palestinians, as negotiated by Foreign Affairs Minister Shimon Peres and Palestinian Authority negotiator Ahmed Qurei (Abu Ala), "imaginary and without any foundation." Yediot Aharonot reported that Sharon was aware of Peres's efforts, which would lead to the establishment of a Palestinian State within eight weeks.

A statement issued by Sharon's media adviser denying the existence of such a plan reiterated the government's refusal to conduct diplomatic negotiations "under fire," adding that the following conditions must be met before talks could be held:

	Terrorists, as well as those who dispatch and operate them, must be arrested
	Illegal weapons in PA territory must be collected and turned over to the U.S.
	Terrorist organizations' infrastructures must be dismantled and their leaders must be detained
	Effective counter-terrorist operations must be undertaken
	Incitement must cease

The statement added that the "appearance of the aforementioned newspaper reports causes severe damage to Israel." Israel Radio quoted Sharon as having said the plan was "wild and dangerous" to the State of Israel.

But according to the Yediot Aharonot report, written by veteran correspondent Nahum Barnea, "Sharon knows the wording of the proposal, and he allowed Peres to bring it up in his discussions with the Palestinians." According to the paper, Peres told associates on Thursday that he had shown the proposal to Sharon. Sharon replied, Peres told them, by saying it was the "closest proposal to [Sharon's] opinions that Peres could raise."

According to Barnea's report, Yediot Aharonot received a copy of the one-page draft of an interim agreement negotiated by Peres and the Palestinians. The draft was not signed, and the Palestinians still had objections over a number of elements of the plan.

Proposed elements of the Peres peace plan
The main elements of the Peres peace plan, according to Yediot Aharonot:

	Cease-fire - within 6 weeks there would be a full cease-fire, including a crackdown on terror, collection of illegal weapons, an end to blockades, a freeze of settlement activities, and the consolidation of all Palestinian militia into one united security force.
	Recognition - within 8 weeks Israel would recognize a Palestinian State on the West Bank and Gaza Strip, initially encompassing Areas A and B, and Palestine would officially recognize Israel on the basis of UN resolutions 242 and 338.
	Permanent status agreement - negotiations would take place over 9-12 months, and cover gradual Israeli troop withdrawals, refugees, Jerusalem, settlements, security and water. Implementation of the permanent status agreement would be over the course of 18-24 months.
	Future relations - there would be an international role in the negotiations and in keeping the peace, and in addition provisions for financial aid to the Palestinians and their economy, regional economic cooperation and an agreed mediation process for potential disputes between the two states.

Yediot Aharonot stated that Sharon did not see much potential in Peres's proposal as the basis for an agreement with the Palestinians. The paper suggested that Sharon gave a "green light" to Peres to negotiate, primarily, to ensure that the Labor Party would not bolt the national unity government.

Maariv did not give details of the proposed interim agreement, but did acknowledge its existence. According to the paper, "Israel and the Palestinian Authority are preparing a wide-ranging diplomatic move with American support, which would lead to what Israeli sources define as a 'gradual permanent agreement.'"

Maariv first reported on Friday that marathon negotiations between Peres and Abu Ala had been held over the course of the last few months. The paper reported that Peres's associates, Avi Gil and Uri Savir, were leading an Israeli team in talks held in Europe.

Both Left and Right dismiss chances of Peres plan
Politicians from both sides of the Israeli political spectrum dismissed the chances that the reported interim plan would lead to an agreement with the Palestinians. Most suggested that Sharon had given free reign to Peres to negotiate with the sole intent of safeguarding his government.

Environment Minister Tzachi Hanegbi called on Sharon to dismiss Peres from his post immediately. "If the Prime Minister calls Peres's moves 'dangerous,' Peres should resign because it is inconceivable that a minister would act officially and endanger the country."

Tourism Minister Benny Elon (National Union) called Peres an "inveterate saboteur." He said, "The government has a clear policy of not negotiating under fire. Peres is making a laughing stock of the government."

Former Justice Minister Yossi Beilin (Labor) said the Palestinians would never accept the plan "because they are not willing to stay with only 42% of the territories. This is an idea that Arafat rejected a month ago." Beilin said Sharon had agreed to a number of things, knowing that they would never be implemented, due to his primary interest of keeping Peres in the government.

Palestinian sources have also reportedly dismissed the plan, as it does not call for a total Israeli withdrawal to the 1967 borders and the establishment of East Jerusalem as the capital of a Palestinian State. Negotiator Saeb Erekat confirmed that negotiations with Peres had been taking place, but denied that any agreement between the sides had been reached.

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