DATE= 05/05/02

TYPE=CORRESPONDENT REPORT -

TITLE=ISRAEL / PALESTINIANS (L-Update)

NUMBER=2-289447

BYLINE=ROSS DUNN

DATELINE=JERUSALEM

CONTENT=

VOICED AT:

INTRO: Israeli Prime Minister Ariel Sharon is visiting the United States

with a new peace plan that proposes excluding the Palestinian leader,

Yasser Arafat. But he may a have hard time convincing President Bush

during their meeting Tuesday. Ross Dunn in Jerusalem has more on the

story.

TEXT: Mr. Sharon is proposing a new peace process that would lead to the

establishment of a Palestinian State -- without Mr. Arafat as its

President.

Before leaving for the U-S, the prime minister told reporters he wants to

discuss with Mr. Bush his plan for peace with the Palestinians.

He insists that Mr. Arafat should not be allowed to take part in

negotiations. He says he will present a detailed report linking the

Palestinian leader to terror attacks.

Under Mr. Sharon's plan, Israeli military operations inside Palestinian

areas would stop -- provided there are no more attacks.

During an interim period, the Palestinian Authority would be allowed to

rebuild its infrastructure and institutions which were badly damaged or

destroyed during Israel's campaign to eradicate Palestinian terror

positions in Gaza and the West Bank.

Mr. Sharon's hope is that the United States and the European Union will

accept that Mr. Arafat should be replaced.

The Sharon plan, at the end of the interim period, would have

negotiations begin on the establishment of a Palestinian State -- but

without Mr. Arafat.

However, reports in American newspapers suggest that Mr. Bush is far

from convinced that there is another Palestinian leader who could

replace Mr. Arafat.

Meanwhile, violence continued Sunday in the West Bank.

A Palestinian woman and her two children were killed when Israeli

soldiers mistakenly opened fire on them after an explosive device

detonated near a tank in the town of Jenin.

And in a separate incident, Israeli authorities are investigating how a

Palestinian held on suspicion of attempted murder of an Israeli naval

officer was able to escape, while being transported in chains, earlier

in the day.

NEB/RD/DW/RH