Mideast Report

JERUSALEM (JTA) — Jerusalem Mayor Ehud Olmert may be indicted for fraud stemming from Israel's 1988 election campaign, when he was Likud Party treasurer.

Olmert is suspected of creating false receipts during the 1988 campaign, a spokeswoman for Attorney General Michael Ben-Yair said Monday, and Ben-Yair has decided to prosecute.

A close ally of Prime Minister-elect Benjamin Netanyahu, Olmert is believed to be a potential Cabinet member in the incoming government.

Olmert on Tuesday denied allegations of financial wrongdoing, calling them "unfounded."

"It is a shame that an affair that took place eight years ago should all of a sudden be raised now," Olmert said in a statement.

Ben-Yair will grant Olmert a hearing, at which he can try to convince him that the indictment is baseless. If Olmert fails, Ben-Yair will then ask the Knesset to lift Olmert's Knesset immunity so that he can stand trial.

Palestinians shot in two incidents

JERUSALEM (JTA) — Israeli border police shot and killed a Palestinian and moderately wounded his brother Thursday of last week in Arab eastern Jerusalem.

The two men and a third Arab had gone outside a building after they heard noises and thought someone was trying to break into their car.

When they came outside, the border police unit saw them and, suspecting the three were armed, opened fire. It was later found that none of the three had weapons.

Israel Television reported that the police unit was in the area as part of its efforts to apprehend suspected Hamas terrorists.

The incident was being investigated by the Justice Ministry.

Meanwhile, in Gaza, Israeli soldiers shot and killed a Palestinian they believed was running toward their outpost with an explosive device.

They opened fire after the Palestinian ignored their orders to stop.

Palestinian police said the youth was mentally ill, and was not carrying any explosive or weapon.

Egyptian newspapers: Netanyahu `rotten'

JERUSALEM (ITIM) — Islamic and leftist opposition newspapers in Egypt have begun printing the last name of Prime Minister-elect Benjamin Netanyahu as two words — `

Natan Yahu

' — which means "This is the rotten one" in Arabic.

The daily newspaper El-Dostor claims credit for the idea, explaining that "natan" means "rotten" and "yahu," "this is," in spoken Arabic.

Though several opposition newspapers adopted the idea, the official government- supported press continues to write Netanyahu's name as one word.

Negotiate Jerusalem, PLO official demands

JERUSALEM (JPS) — The peace process will stop if Prime Minister-elect Benjamin Netanyahu halts negotiations over the future of Jerusalem with the Palestinians, Faisal Husseini, the senior Palestine Liberation Organization official in the city, said Tuesday.

Husseini made the comment at the PLO's East Jerusalem headquarters, Orient House, to foreign diplomats. Netanyahu said after the meeting that the PLO office should be shut down permanently.

Responded Husseini, "The Orient House is the center for peace in this area. Closing Orient House means closing the negotiations."

Furthermore, "If someone will say no negotiations on Jerusalem… I don't believe that this peace process will have any chance," Husseini said.

Arabs visit Israel for heart conference

JERUSALEM (JTA) — Egyptian, Palestinian and Jordanian doctors were among the hundreds of participants in a cardiology conference last week at Shaare Zedek Hospital here.

The Israelis who hosted the Sunday gathering said the event was more of an exchange of information among professionals than a breakthrough in the diplomatic arena.

But some in the eight-member Egyptian delegation were quoted by Israel Television as saying that they were concerned about being boycotted upon their return to Egypt.

Shas leader ailing, fans blame the press

JERUSALEM (JPS) — The leader of the now-powerful Shas Party, Aryeh Deri, was under observation at Hadassah-University Hospital in Jerusalem Tuesday after suffering a "minor" stroke, doctors said.

The 38-year-old MK, who smoked cigarettes heavily when he was a yeshiva student and now puffs regularly on a pipe, complained of a lack of feeling in his arms and hurried to the hospital late Monday night.

A stroke is caused by a blood clot or bleeding in the brain. If it blocks a major blood vessel, it can cause oxygen starvation in the brain tissues, but if it affects a small vessel, it can pass without damage.

Deri's supporters blamed Israeli press coverage of a financial scandal he is allegedly involved in for his condition.