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EGYPT, SAUDI ARABIA TONE DOWN ARAB CRITICISM OF U.S. AND ISRAEL

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Egypt and Saudi Arabia, despite objections from Iraq and the Palestine Liberation Organization, persuaded Arab leaders Wednesday to moderate the Arab summit's final resolutions on Middle East issues, Palestinian sources said.

Meanwhile, Palestinian guerrillas in small speedboats launched a two-pronged attack on Israeli beaches crowded for the Shavuot holiday Wednesday. Israeli soldiers killed four of the raiders and captured several more.No Israelis were reported killed or injured, but thousands were forced off beaches on the Festival of Weeks holiday which marks the giving of the Ten Commandments.

Israel armed forces radio said the mother ship came from Libya and the guerrillas had planned to kill civilians in Tel Aviv.

At the summit of 21 Arab ministers in the Iraqi capital, the PLO elicited criticism of Israel and the United States, but the leaders did not condemn a stalled U.S.-backed plan calling for dialogue between Israel and a non-PLO Palestinian delegation.

"Iraq and the PLO requested stronger language to be used in the resolution against Israel and the United States, but Egypt and Saudi Arabia spearheaded efforts to ensure that a more moderate and practical tone prevailed," one Arab envoy told United Press International.

"Both the Egyptians and the Saudis feel it is better that the Arab message gets across to the United States and the Soviet Union before their Washington summit in a moderate and clear manner . . . they feel the fiery rhetoric of Iraq and the PLO would not serve a useful purpose at this stage."

Western diplomatic sources said in addition to Egypt and Saudi Arabia, Morocco also played a key role in ensuring a moderate resolution was passed.

The PLO wanted the summit to discuss fears that mass Soviet Jewish migration to the occupied territories might hinder Palestinian chances of statehood. And in a final conference resolution, the participants said the settlement of Soviet Jews in the occupied territories is seen as a threat to Arab interests.

Arab officials said one proposal included an international conference on the Middle East with PLO participation, but the group was persuaded not to condemn the U.S. plan at its three-day summit.

Wealthy Arab states such as Saudi Arabia also pledged cash support for Jordan, which is facing near bankruptcy, and to the Palestinian intifada, or uprising, in the occupied territories, the sources said.

But the summit was marred from the beginning by the absence of five of the 21 Arab leaders, including Syrian President Hafez Assad, who remains a key regional power-broker despite diminished Soviet support.

Egyptian President Hosni Mubarak also notched another success at the summit by persuading Arab leaders to hold their annual ordinary meetings in Cairo starting this November.

Mubarak last year restored ties with radical Arab states such as Libya and Syria, ending Egypt's isolation in the Arab world since his predecessor, Anwar Sadat, signed a controversial peace treaty with Israel in 1979.

The summit also welcomed the new Yemen Republic into the Arab fold. The formerly Marxist South Yemen and the conservative, Islamic-oriented state of North Yemen united under the leadership of President Ali Abdullah Saleh.