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Yasser Arafat said he was speaking in a religious sense when he urged Muslims to liberate Jerusalem, and Foreign Minister Shimon Peres of Israel accepted the explanation Wednesday with a handshake.

Arafat and Peres were in Oslo to honor Norway for its contributions to the Middle East peace process.Earlier, Arafat ignored reporters when they asked him if he had urged Muslims to wage a "jihad" in a speech May 10 at a mosque in South Africa. But later at a news conference, he denied that he had advocated violence.

"What I had mentioned exactly was a religious term," Arafat said.

"We remain committed as a people and as a leadership . . . that we can reach peace, not just for the Palestinian people, but also for the Israeli children and people," he said. "I could say I will continue on a jihad to achieve real peace."

Peres, waiting in the wings, then entered the news conference, shook Arafat's hand and sat next to him.

The comments that angered many Israelis were broadcast by Israeli radio. In a tape of the speech, Arafat said: "You have to come and to fight and to start a jihad to liberate Jerusalem, the historic shrine."

Jihad can mean anything from a political effort to a violent struggle but is often translated as "holy war."

Peres had denounced the speech. "A call to the `jihad' stands purely against all of what we have agreed upon," he told reporters at the airport. A call to holy war "puts in danger the continuation of the negotiations."

On Tuesday, Israeli Prime Minister Yitzhak Rabin said Arafat may have violated the accord signed May 4 in Cairo, Egypt, in which the Palestine Liberation Organization agreed not to use violence or terror but to negotiate peacefully on the question of Jerusalem's status.

Peres and Arafat met during Wednesday's ceremony commending the back-door Norwegian diplomacy that led to an agreement on limited self-rule for Palestinians in the Gaza Strip and Jericho.

The last Israeli troops Wednesday left the parts of Gaza designated in the accord.