DATE=05/07/02

TYPE=CORRESPONDENT REPORT

TITLE=ISRAEL / PALESTINIANS (S-UPDATE)

NUMBER=2-289513

BYLINE=ROSS DUNN

DATELINE=JERUSALEM

CONTENT=

VOICED AT:

/// EDS: UPDATES CR 2-289499 ///

INTRO: A deal to end Israel's siege of Bethlehem's Church of the Nativity is running into trouble. The Israeli military says an end to the 36-day stand-off is being delayed because no country has yet agreed to take in a group of wanted Palestinians, who have been holed up inside the shrine. Ross Dunn reports from Jerusalem.

TEXT: Israeli and Palestinian negotiators have accepted an agreement to end the five-week stand-off at the Church of the Nativity, built over the grotto where tradition holds Jesus was born.

Under the proposed deal, 13 wanted Palestinians would be sent into exile, another 26 wanted Palestinians would be transferred to the Gaza Strip, and 80 others inside the church would be set free.

However, last minute doubts have emerged over at least one key part of the accord -- the exile of 13 Palestinian militants to Italy via Egypt.

Italy, which was supposed to be the country of refuge for the 13, says it could not accept the gunmen because it had not received any official asylum request.

Due to the impasse, it is understood the 13 Palestinians militants would be transferred to Egypt until a decision is reached on their final destination. (Signed)

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