HIGHLIGHTS: The Signing of the Law by Arafat Comes in Response to the New U.S. Law Recently Signed by Bush Requiring White House to Stipulate on Documents that Jerusalem is the Capital of Israel||PLC to Discuss New U.S. Law Sunday||Bush Checks British Push for Peace Talks||A Second Palestinian Teen-ager Killed in Less than 24 Hours||Sharon Expected in Washington Oct. 16th ||Solana Expected in the Middle East Sunday||Hamas Attacks an Israeli Occupation Army Patrol in Gaza||STORY: President Yasser Arafat signed a law on Saturday formally declaring Jerusalem to be the capital of a future independent Palestinian state, legislative speaker Ahmed Korei said.

"President Arafat signed the 'Jerusalem The Capital' law stipulating that Jerusalem is the capital of a future independent state and the center of the legislative, judicial and executive authorities," Korei, speaker of the Palestinian Legislative Council (PLC), said.

Korei said Arafat decided to sign the law, which had been presented to him by the PLC two years ago, in response to the new U.S. legislation which President Bush signed this week requiring the government to stipulate on documents that Jerusalem is the capital of Israel.

Arafat has often spoken of the Palestinians' determination to make Arab East Jerusalem the capital of a future independent state. The PLC was due to discuss the new U.S. law in a special session on Sunday.

Israel captured Arab East Jerusalem in the 1967 war and annexed it in a move not recognized internationally. It regards the entire city as its indivisible capital. The status of Jerusalem was to be negotiated.

It was not immediately clear what difference, if any, the signing of the law would have on Palestinian Authority transactions or documents.

Arafat called the law Bush signed a "catastrophe," and Palestinians and Arabs saw it as a biased move backing Israel's claims to the city.

Negotiations between Israel and the Palestinians deadlocked before a Palestinian uprising against Israel occupation erupted in September 2000.

PALESTINIAN TEEN-AGER KILLED AS REPORT SAYS BUSH CHECKS BRITISH PUSH FOR PEACE TALKS

A second Palestinian teenage stone-thrower was killed in less than 24 hours, as reports emerged that US President George W. Bush had dashed a British push for peace talks by year's end.

Amar Rajab, 15, was among a group of youths defying a curfew in Ein Beth Ilma refugee camp, near Nablus in the northern West Bank, and throwing stones at occupation army jeeps Saturday, Palestinian witnesses and hospital sources said.

The hospital sources added that five other Palestinians were wounded in Nablus and the surrounding area in other incidents with Israeli occupation troops.

Witnesses said more occupation troops were being deployed after the latest violence in the city, where the population has grown increasingly restive since the occupation army seized it along with most of the West Bank in June.

On Friday, a teenager was killed in similar circumstances in the northern border village of Barta'a.

In the town of Jenin, a Palestinian was seriously wounded late Saturday as he drove his car in violation of an Israeli curfew.

Aisa Hamarshi, 51, was hit in the head by a bullet fired from an Israeli tank and evacuated to a hospital inside the Jewish state, Palestinian medical officials said.

Two other people were slightly hurt in the same incident, they added.

As the death toll in the two-year-old Palestinian uprising approached 2,500, the Guardian newspaper in London reported that Prime Minister Tony Blair's drive for Middle East peace talks had been rebuffed by Bush, only days after he flagged the plan, amid gathering clouds of war over Iraq.

Blair pressed on Tuesday for a resumption of Israeli-Palestinian talks, coupled with an international conference by January.

According to the Guardian, Bush blocked the initiative and made it clear to Blair that he does not want such talks to be held in the near future.

In sharp contrast to Arafat's marginalisation at the White House, Israeli Prime Minister Ariel Sharon was expected in Washington October 16 to discuss with Bush the stalemated position in the Middle East conflict, a senior US official said on condition of anonymity.

The talks come as Bush prepares for a US military campaign to oust Iraqi President Saddam Hussein, one of Israel's longtime regional foes, whom Washington accuses of hiding weapons of mass destruction.

For his part, Arafat charged that Israel is using the US-led campaign against Iraq as a smokescreen to launch major attacks on the Palestinian people.

EU foreign policy chief Javier Solana, who is expected in the region Sunday, said he would push Arafat to form a "functional government" that would include a prime minister, a demand the Palestinian leader has resisted until now.

Solana plans to meet Arafat on Monday.

In the northern Gaza Strip, the Resistance Islamic group Hamas said its forces ambushed an Israeli occupation army patrol Saturday morning, setting off two bombs as the soldiers went by.

The armed wing of Hamas claimed the attack in a statement received by AFP and said the Israelis had suffered a number of casualties.

For its part, the army confirmed that there had been one explosion, but denied that there had been any casualties.

PHOTO CAPTION

Palestinian hospital workers show the body of Palestinian Amar Hashem, 15, killed by a shot to the head during clashes with Israeli occupation forces in the Al Ein refugee camp in the northern West Bank city of Nablus Saturday Oct. 5, 2002. (AP Photo/Lefteris Pitarakis)
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