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06/13/97 - 12:30 AM ET

Clashes resume in Gaza, peace talks still on hold

RAFAH, Gaza Strip - Hundreds of Palestinians clashed with Israeli troops and Jewish settlers Thursday in the Gaza Strip. Five Palestinians were wounded by gunfire, and an elderly man died of a heart attack after inhaling tear gas.

The violence erupted while Egyptian envoy Osama el-Baz shuttled between Israeli and Palestinian leaders, trying to break a three-month freeze in peace talks between the sides.

Before meeting with Israeli Prime Minister Benjamin Netanyahu in Tel Aviv, el-Baz said he believed "matters are moving in the right direction."

But after talks with Palestinian leader Yasser Arafat in autonomous Ramallah, he said only that consultations would continue.

Palestinian chief negotiator Saeb Erekat said Arafat's meeting with el-Baz demonstrated the large gap between the two sides. "I would not advise raising any expectations," he said.

The Palestinians say Israel must freeze the construction of Jewish settlements in the West Bank and Gaza Strip and halt work on a new Jewish neighborhood in a disputed area of Jerusalem where the Palestinians want to set up a future capital.

Publicly Netanyahu has refused to budge, although media reports have said Israel is offering to slow nearly to a halt the construction in Jerusalem on land Israel captured in the 1967 Middle East war.

Meanwhile, Gazan protesters clashed with Israeli troops over land they said was confiscated by Israel for a settler access road. Israel denied the land had been expropriated and said the Palestinians were angered by a fence built around the settlement.

About 3,000 protesters came to the disputed area near the Jewish settlement of Morag to plant olive and fruit trees. When Israeli troops ordered the Palestinians to leave, they hurled stones at the soldiers, who responded with tear gas and gunfire.

A 72-year-old protester, Abed Karim Krinawi, collapsed, apparently after inhaling tear gas. Doctors said he died from a heart attack.

Two Palestinians were wounded by shrapnel and one by a rubber bullet, hospital officials said. A dozen other Palestinians were beaten with clubs by the Israeli soldiers, witnesses said.

In a second clash, Palestinian truckers blocked the entrance to a Gaza settlement bloc in an attempt to prevent the unveiling of a memorial for an Israeli soldier killed in a gunbattle between Israeli and Palestinian troops last fall.

Palestinians hurled stones at Israeli cars stuck in traffic, smashing several windshields, and shots were fired at one Israeli car.

Palestinian hospital officials said three Palestinians were wounded by gunfire in the confrontation, including two who were in serious condition.

It was not immediately clear who fired the shots. A Palestinian reporter at the scene saw a settler fire in the air after his car was stoned, but did not see shots aimed at Palestinians.

Also Thursday, a top Palestinian official warned the Palestinians would pull out of peace talks if the United States recognized Jerusalem as Israel's capital and moved its embassy there.

Ahmed Qureia, speaker of the Palestinian legislative council, said he hoped the Clinton administration rejected the House of Representatives resolution, approved Tuesday, to recognize Jerusalem as Israel's undivided capital.

If not, "it will lead to violence ... and take the Palestinian people out of the peace process," Qureia said in a statement.

The House also allocated $100 million to move the U.S. Embassy from Tel Aviv - where the United States and most other countries have their embassies in Israel - to Jerusalem. The administration has argued that this might hinder the peace process.

By The Associated Press

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