DATE=05/14/02

TYPE=CORRESPONDENT REPORT

TITLE=ISRAEL / PALESTINIANS (S-UPDATE)

NUMBER=2-289787

BYLINE=MEREDITH BUEL

DATELINE=JERUSALEM

CONTENT=

/// UPDATES CR 2-289768 ///

INTRO: Israeli Prime Minister Ariel Sharon says he will not resume peace talks with the Palestinians until there is an end to terrorist attacks and sweeping reforms within the Palestinian Authority. Correspondent Meredith Buel reports from Jerusalem.

TEXT: In a speech to parliament, Prime Minister Sharon said Israel will only begin peace negotiations with the Palestinians if two conditions are met.

Mr. Sharon says there must be a "complete cessation of terrorism, violence and incitement."

The prime minister says the Palestinian Authority must also undergo "basic, structural reforms in all areas."

Mr. Sharon says there must be "complete transparency and organizational responsibility" within the Palestinian Authority.

The prime minister says there can not be any peace with what he called "a dictatorial, corrupt, tyrannical regime."

Mr. Sharon says once those conditions are met, Israel will enter into what he called "a staged solution, a settlement involving a long-term interim agreement with the Palestinians."

He says when Israel sees how the Palestinians are "building up their society," and "are determined to achieve peace," only then will the Jewish state be prepared to "sign a permanent peace agreement."

Prime Minister Sharon says Israel will continue to launch raids into Palestinian-ruled territory to crack down on militants. (Signed)

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