Associated Press

Cairo, January 26

Saudi Arabia denied reports it is working on a new initiative for a comprehensive peace agreement between Israel and the Arab world, saying today it remains committed to a peace proposal endorsed by the Arab League two years ago.

"Saudi Arabia has no new initiatives. It only has the Arab initiative it presented to the Arab League in March 2002," Osama Nuggali, director of the press department at the Saudi Foreign Ministry, said.

"The kingdom remains committed to that initiative," Nuggali said.

His remarks came in response to reports the kingdom is preparing a new peace initiative that envisions the Arabs absorbing 2 million Palestinian refugees.

Nabil Shaath, the Palestinian foreign minister, said yesterday that the new proposal would call for Israel to withdraw from land captured in the 1967 Mideast War and agree to the establishment of an independent Palestinian state with Jerusalem as its capital in return for peace with the Arab world.

Shaath said the Palestinians, Egypt and Jordan are helping draft the latest plan. Nuggali said the report on the refugees was "baseless."