Barak says he's optimistic of final agreement with Palestinians

Israeli Prime Minister Ehud Barak said Sunday he is optimistic about achieving a final agreement with the Palestinians, but admitted that Israel lives in "a tough neighborhood" and must be prepared to defend itself.

Israeli Prime Minister Ehud Barak said Sunday he is optimistic about achieving a final agreement with the Palestinians, but admitted that Israel lives in "a tough neighborhood" and must be prepared to defend itself.

Speaking in New York to the Conference of Presidents of Major American Jewish Organizations, Barak said the key to seeing the peace process to completion was for Israelis and Palestinians to agree upon a "win-win strategy rather than a zero-sum game."

"There will be a lot of ups and downs, but there is no better opportunity ... to put an end to 100 years of conflict in the Middle East," he said, adding that "all issues" will be put on the table, including "settlements, borders and refugees."

Israel and the Palestinians recently launched talks aimed at reaching a final peace agreement by late next year. The Palestinians hope to establish an independent homeland in territories controlled by Israel.While Barak said he was "very optimistic," about the peace process, he emphasized the precarious nature of relations in the Middle East, likening it to a tough neighborhood.

"In such a neighborhood you cannot base your security and your hope for the existence of a Jewish state on a document," he said.

Instead, the Israeli prime minister said his nation must rely on its own institutions, including the strength of its military, as well as its unique alliance with the United States.

Barak also responded to what Israel has said are provocative statements made in the media recently by the Palestinians.

Last week, Israeli officials condemned comments by Soha Arafat, wife of Palestinian leader Yasser Arafat, when she accused Israel of using "poison gas" against Palestinians.

The comments were made during a visit by U.S. First Lady Hillary Rodham Clinton to Israel and the West Bank. Mrs. Clinton sat silently beside Mrs. Arafat as she delivered her stinging remarks.

Barak called Mrs. Arafat's statements "baseless and damaging.""This kind of expression should be suppressed by the Palestinian leadership," he said.

Mrs. Clinton has received considerable criticism for embracing Mrs. Arafat after the speech and only condemning her remarks hours afterward.Barak, however, defended Mrs. Clinton's trip to Israel, saying it had been a success.

"I hope we will always have such fine friends as the Clintons," he said.Barak is in the United States on a brief visit to address Jewish groups and business leaders.

Later Sunday, Barak met with Cardinal John O'Connor, the top Roman Catholic official in New York City. The two men discussed upcoming millennium celebrations, the pope's planned visit to Israel in March and ways to reduce tensions between different religions, an Israeli source said.

Israel has been trying to mediate a dispute in the the northern town of Nazareth, the town of Jesus' boyhood, where Muslims want to build a mosque near a Christian holy site.

In a speech Saturday night, Barak presented a detailed vision of peace and prosperity in the Middle East.

Speaking to the Israel Policy Forum, a pro-peace process American Jewish group, Barak noted his belief that peace would require "separating" Israelis and Palestinians. But he conceded the futures of the two peoples cannot be severed.He said a future peace agreement would include free trade, broad economic cooperation and continuing to allow some Palestinians to work in Israel.