HIGHLIGHTS: Arab League and OIC Support Morocco in Island Row with Spain||Both Countries Keen to Resolve Dispute 'Through Dialogue'||Spain Uses Same Arguments Used by Britain to Justify Remaining in Gibraltar|| STORY: The Spanish Government has recalled its ambassador to Morocco amid a spat between the two countries over the tiny island of Perejil. (Read map caption)

The Office for Diplomatic Information said Fernando Arias Salgado was called home for an indefinite period because Rabat had failed to respond to a letter Madrid sent on 11 July, when Morocco sent a dozen troops to the uninhabited island.

Spain says the soldiers violate Spanish sovereignty, but Morocco says the island, which lies just 200 metres (220 yards) off the Moroccan shore in the Straits of Gibraltar, forms part of its territory.

Morocco's Foreign Minister, Mohamed Benaissa, has said that his government is keen to resolve "through dialogue" its differences with Spain over the disputed island.

Mr Benaissa - whose government is supported in the dispute by the 22-member Arab League - said the reaction of both Spain and the European Union, which has called on Morocco to withdraw, was disproportionate.

Spanish Prime Minister Jose Maria Aznar, despite deploying the warships, has not threatened the use of force to remove the soldiers from the island.

He said the government was making every diplomatic effort to restore what he called international legality, and made the point that Spain had important trade and aid relations with Morocco.

That has been interpreted as a hint that economic sanctions are an option - perhaps through the suspension of a 1991 co-operation and friendship treaty.

The spat has coincided with an announcement in London that Britain is prepared to share sovereignty with Spain in Gibraltar.
Spain has held on to its enclaves in North Africa using very similar historical arguments as those used by Britain to justify its claim on Gibraltar.

The presence of troops on the island, which lies within Moroccan territorial waters but which Spain lays claim to, has become the focus of high tension.

Morocco, which says it sent the troops as part of effort to crack down on terrorism and illegal immigration, has refused to withdraw the soldiers - rebuffing both warnings from Spain as well as pressure from the European Union and Nato to do so.

PHOTO CAPTION

PEREJIL ISLAND: *200 meters off the Moroccan shore|| Less than 1km in diameter|| Rocky & uninhabitabited || Visited by herdsmen who take their goats to graze|| Named after wild parsley which grows there-Perejil means"parsley" in Spanish|| Known in Morocco as Leila.