Mideast peace talks are picking up speed as Palestinian negotiators explore with Israel its proposal for elections leading to limited self-rule on the West Bank and in Gaza.

Israeli spokesman Benjamin Netanyahu said Tuesday there is progress on all the other negotiating fronts as well - in Israel's talks with Syria, Jordan and Lebanon."We think the talks have reached a stage where we can remove the gaps between the sides," Netanyahu said.

Israel on Monday presented a proposal for municipal elections in some parts of the Israeli-held territories. Netanyahu said broader elections would be held subsequently, after complex negotiations.

The idea is to clear the way for an alternative to the Palestine Liberation Organization to emerge, Netanyahu said. The elected Palestinians would make arrangements with Israel for them to run factories, farms, hospitals and other day-to-day activities.

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Netanyahu, while providing few details, emphasized that Israel would not deal with PLO members. However, he said Israel would not probe the "sympathies" of Palestinians.

The pace seemed to satisfy Secretary of State James A. Baker III. "The peace process is alive and well," he said.

But Palestinian spokeswoman Hanan Ashrawi said "there was disappointment" in her delegation and that Palestinians had "several objections" to the Israeli proposal.

"The Israelis still have a hard time shedding the role of occupier," she said.

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