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Poverty is the main threat to peace between Israelis and Palestinians, Israel's foreign minister said Monday as he and Yasser Arafat tried to revive flagging peace talks.

Foreign Minister Shimon Peres said he, the PLO leader and Swedish officials were discussing ways to bridge the Palestinians' need for "dignity and freedom" with Israel's need for security.Unrelieved squalor in Palestinian-run lands since autonomy began in May has won support for extremist Islamic groups bent on wrecking the peace with Israel through deadly attacks on Israelis.

"Poverty is today the main enemy of peace," Peres said.

And the next year or two "may be the most difficult years" for the Palestinian people because of their bleak economic situation, he said.

Peres and Arafat both pledged their commitment to peace, despite problems that have held up Palestinian elections and the withdrawal of Israeli troops from Palestinian towns in the West Bank.

Arafat went out of his way to address the Muslim extremists lining up against the PLO's September 1993 agreement with Israel on Palestinian autonomy.

"For your information, we are completely committed to what we have signed," the Palestine Liberation Organization leader said.

Peres and Arafat are looking for speedy economic and social help to rebuild the Palestinian areas. Foreign donors have been reluctant to deliver the huge amounts of aid needed to produce a change in the autonomous Gaza Strip and West Bank town of Jericho, afraid it will be squandered.

The two men came for a one-day visit to Sweden from Norway, where they and Prime Minister Yitzhak Rabin of Israel picked up their Nobel Peace Prizes but failed to score a breakthrough in peace talks.

The autonomy process was to have entered its second phase, which includes Palestinian elections and the Israeli troop pullback.

But the two sides have been wrangling over the makeup of the planned Palestinian governing council, which was to have been elected five months ago.