"It is the Israeli side that requires rehabilitation for peace, not us," he said. Qureia (Abu Abbas) reiterated demands for a Mideast conference that would discuss Arab demands prior to the establishment of a new Arab state. Blair originally had suggested such a conference but later backed down, particularly after Israeli objection that the idea was premature.



Abu Mazen, on the other hand, welcomed Blair's initiative when they met in Israel this past week. The London conference is to discuss political and economic reform in the PA.



The split over a London conference was the first major public division between the two Arab leaders since they took command following Yasser Arafat's death. Abu Mazen, the PA Fatah party's candidate for president, is expected to win the scheduled January 9 elections,



The margin of his victory in part will determine how much authority he will be able to wield. One major influence may be the outcome of municipal elections in several Arabs towns and villages held Thursday. Results are to be announced Saturday. A high turnout of voters prompted analysts to predict that Fatah lost strength to Hamas.



Elections in ten large urban centers are slated for the coming week.