TOKYO — Palestinian Authority President Yasser Arafat said Friday that resolving the question of Jerusalem is the most important factor for achieving peace in the Middle East.
"As far as we're concerned, Jerusalem is the solution. The holy city of Jerusalem belongs to us and is the key to peace," he told a news conference in Tokyo, where he attended a Palestinian aid donors meeting. "There can't be any peace without the solution of the Jerusalem question."
The fate of Jerusalem, Jewish settlements in the West Bank and Gaza Strip and Palestinian refugees, and borders and water resources, are among the thorny issues to be resolved with Israel by September, according to the latest agreed timetable.
Both Israel and the Palestinians claim Jerusalem as their own.
Arafat said Israel's stance on West Bank settlements was "the main issue that we should concentrate on," along with land confiscation, which he noted still continues under the new government of Prime Minister Ehud Barak.
Barak's government has granted nearly 2,600 housing permits since taking office in July, said to be more than the number awarded in the three years under his hard-line predecessor, Benjamin Netanyahu.
But Arafat also hailed as a positive step Friday's release of a number of Palestinian prisoners and said he felt that the election of Barak as prime minister had been "a vote for peace."
He said Palestinians face many economic hardships and that he was grateful for the support of aid donors.
Earlier Friday, officials of donor nations said they were optimistic about the peace process and the Palestinian economy.
"We are seeing real growth in the economy: Employment is up, and the steady decline in per capita income has been halted," said Knut Vollebaek, foreign minister of Norway, which co-chairs the aid committee with Japan.
But Vollebaek also warned that the committee was concerned about fiscal management and macroeconomic policy.
Arafat said he was working to draft laws "within a modern framework that ensures effectiveness, integrity, openness, transparency and accountability."
Arafat met with Japanese Prime Minister Keizo Obuchi and Foreign Minister Yohei Kono during his visit to Japan, which began Thursday.
Japan on Thursday pledged $20 million in new aid to the Palestinians.