Mr. Abd Rabu, and the members of the Palestinian Delegation,

In the life of nations there comes a time when crucial decisions have to be made and there is nothing to be gained from avoiding these decisions.

At these junctures in history, heavy burdens are imposed on the leaders involved and nations are plunged into debate and internal conflict. Prime Minister Ehud Barak and Chairman Yasser Arafat have taken the decision to renew the process to end more than one hundred years of conflict between the people of Israel and the Palestinian people. This should not be simply an end to a conflict but a fair and just solution for both sides. It has to be a realistic and comprehensive solution, putting an end to dreams and aspirations which question the very existence of the parties to the conflict.

This has to be an Agreement which will create a stable, durable and just foundation to our own lives, as well as to the generations to come in this part of the world. We recognize the enormity of the problems, we are aware of the differences in our position which will reveal themselves in the days of negotiation ahead of us, but we commit ourselves - with no reservations - to holding these negotiations as partners, to maintaining a dialogue based on mutual respect.

After years of strife and conflict we need to listen to each other and to respect each other's points of view even when we disagree. We have come here to negotiate and to reach a solution.

No one else can decide for us. Only Palestinians and Israelis can, negotiating between ourselves, reach the solutions to all the issues on which we differ, and I repeat - it is our wish to reach a permanent and comprehensive peace with you as our neighbors.

This peace should be based on security - long-term and immediate. The act of terror yesterday serves to refresh our memory and awareness of this requirement. The peace should be based on economic security as well, ensuring a stable environment for economic growth and prosperity. And last but not least, it should be based on mutual respect and partnership.

We have set ourselves an ambitious timetable for resolving the outstanding issues between us and for reaching a Comprehensive Agreement on Permanent Status by the agreed target date of September 2000. In reaching this goal, the next 100 days will be crucial. In this time, both sides have undertaken to conclude a Framework Agreement on Permanent Status.

This Framework Agreement should serve as a road map for the comprehensive Permanent Status Agreement. It should comprise the essential elements of the agreed solution to all remaining issues to be negotiated between us, as stipulated in all our previous agreements. It should address these issues - the most important and complex ones we face - in a definitive way, while leaving the detailed formulation of arrangements for implementation to the Comprehensive Agreement, which should bring about the full and final resolution of the Israeli-Palestinian dispute, in all its aspects.

While recognizing that this is a new phase in our relations, we must first acknowledge that we are marching on a road, parts of which were paved earlier. Both Palestinians and Israelis participated in the Madrid Conference of October 1991.

Both concluded the historical document which really ushered us into the new era in our relations - the Declaration of Principles of September 1993. We continued with the agreements of May 1994, September 1995, the Hebron Protocol of January 1997, the Wye River Memorandum of October 1998, and last but not least the Sharm el-Sheikh Memorandum of September 1999.

These agreements and memoranda are based on the mutual commitment of the two sides to Security Council Resolutions 242 and 338. They guide us toward the Framework and will lead us to the comprehensive agreement which should bring about the absolute end of our conflict.

The Declaration of Principles of September 1993 and the subsequent documents have created the agenda for our negotiations beginning today. Clearly each side may raise other issues to be included in the agenda. We will together decide how we want to tackle them, but with your permission Mr. Abd Rabu, I would like to state that just as you represent the overwhelming Palestinian consensus on the major issues - so do I for Israel. To all Israelis, regardless of their political views, Jerusalem is our capital and it should continue to be so. Under its sovereignty Israel has proven its sensitivity to all religions and to the sanctity of freedom of worship. We therefore maintain that it should remain united, open and under Israel's sovereignty.

Ours is a region of uncertainty, of a volatile nature and of violence. As a nation which was subjected to forceful attempts to bring an end to its existence as a political entity, one can understand our deep concern for long-term, meaningful, non-virtual security, based on borders that are secure and on demilitarization.

The pre-1967 lines clearly do not provide for this. Establishing secure borders should equally leave most of the Israelis residing today in the West Bank and Gaza under Israeli sovereignty.

We aim not to dominate our neighbors but to live in good neighborly relations and harmony next to each other, with borders which separate us but do not detach us in the various spheres of life. Let me make it clear that in this respect Israel will do its utmost to assist the Palestinians long-term economic stability.

We are not indifferent to the plight of the Palestinian refugees throughout the last fifty-one years. We believe, however, that in order to bring about a permanent and stable solution which does not perpetuate the conflict, this cannot be found within the borders of Israel. Any solution to the refugee problem must create a strong, economic foundation to their well being, collectively and individually, wherever they reside.

Stating our key positions as we enter the negotiations is by no means contrary to the need for both delegations to use every bit of ingenuity and creativity to make it possible to reach a Framework Agreement on Permanent Status. We must promise to conduct our negotiations with an open mind, a sense of partnership, and respect for each other's views and beliefs.

We shall need to remind ourselves during the weeks ahead that failure to reach a just and agreed framework may entail the paying of a heavy price by both peoples for many years to come. Since I believe that the path of continued conflict cannot serve the course and interests of either people, it is certain that if we fail this time we may return to the negotiation table - but only after having suffered further pain and agony.

The eyes of the world are focused on us today and will continue to be so for the next few months. Clearly the Israeli-Palestinian conflict is but one of many which draw the attention of leaders of the leading Nations to other areas of tension. We should therefore thank the United States, the European Union and the European Countries, Russia, Canada and Japan for their special and continuing efforts to help us attain a reasonable, stable and durable peace. We welcome the constructive advice of Egypt and Jordan.

Last but not least, the Israeli delegation is grateful for the warm and friendly hospitality here in Ramallah.

Dear Colleague, I was born only five kilometers from where you were born. This symbolizes the roots of the conflict and yet - we are starting out together today on the same road towards a better future. You have my government's commitment - as well as my personal commitment and that of my colleagues - to make every possible effort to reach this goal.

It will be an honor to disagree with you - but it will be a fulfillment of a life's dream to shake hands with you at the end of the process and to say "Brother and comrade, we did it".