AMMAN, Jordan — Leaders at the Arab summit failed to reach an agreement on how to resolve the conflict between Iraq and Kuwait, the Arab League secretary-general announced Wednesday.

Esmat Abdel-Meguid interrupted his reading of the summit's final statement to say that the leaders were unable to reach consensus on the state of affairs between Iraq and Kuwait.

He said Jordan's King Abdullah II, who took the one-year rotating presidency of the Arab summit, would hold further consultations.

The communique made no reference to Iraq, but a separate document, the Amman Declaration, calls for lifting sanctions against Iraq and coordinating on humanitarian issues related to prisoners and the missing in Iraq and Kuwait. The declaration is a separate, non-binding document that will form the basis for further talks.

The final statement expressed the leaders discontent with the late-night U.S. veto of a resolution backing a U.N. observer force to help protect Palestinians.

"The Arab leaders expressed their total rejection of the American pretexts in this regard and called on the U.N. Security Council to provide the necessary protection to the Palestinian people," he quoted the final communique as saying.

Later, in a press conference, Abdel-Meguid said the U.S. position is "in total contradiction to its responsibilities toward the peace process."

Palestinian Minister of Information Yasser Abed Rabbo praised the summit as "positive and fruitful."

"These results will give us more confidence and will enable us to confront all possible circumstances," he said.

Throughout six days of meetings, ministers and heads of state worked to hammer out an agreement between Iraq and Kuwait. The rejected proposal called for a lifting of sanctions imposed on Iraq after its 1990 invasion of Kuwait, but also called on Iraq to comply with its obligations under U.N. resolutions.

It emphasized the respect of Iraq and Kuwait's sovereignty and territorial integrity and, without mentioning Iraq, called for an end to the production of weapons of mass destruction and monitoring (of Iraq's programs). It also called for the necessary steps to be taken to resume commercial flights to and from Iraq.

In addition to demanding a call for the lifting of sanctions, Iraq wanted support for the lifting of two no-fly zones patrolled by the United States and Britain, something Kuwait and Saudi Arabia rejected. The two countries largely depend on the Western powers for protection.

Kuwaiti Foreign Minister Sheik Sabah Al Ahmed Al Sabah said Iraq had turned down the proposal.

"Kuwait and all others have accepted this proposal which is in the interest of Iraq and the Iraqi people," he said.

Iraqi Foreign Minister Mohammed Saeed al-Sahhaf blamed Kuwait for the failure.

"There was agreement with the head of the Iraqi delegation on the last touches . . . but the Kuwaiti delegation rejected it. They hold the responsibility for the failure of this resolution," al-Sahhaf said.

Jordanian Foreign Minister Abdul-Illah Khatib said deliberations over Iraq and Kuwait have not been a total failure. "We have listened to the requests and concerns of our brothers in Iraq and Kuwait . . . but in view of the limited time frame for this summit, we could not reach consensus on all texts."

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He said they did reach progress on major problems and had a basis for further talks.

The leaders also agreed to adopt a recommendation to pay the Palestinian Authority $40 million a month for six months to cover salaries, health and education costs. Other issues included confirming Egyptian Foreign Minister Amr Moussa as the new secretary-general of the Arab League and agreeing to hold the next summit in Lebanon.

Moussa, 64, a diplomat by training and a former ambassador to the United Nations, is well-respected in the Arab world. He has played a leading role in the Middle East peace negotiations. He was Egypt's foreign minister for 10 years. Moussa starts his five-year term in mid-May.

The leaders also announced their unanimous endorsement of Kofi Annan for a second term as U.N. secretary-general, the first time the Arab League has reached consensus over a U.N. chief.

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