Jerusalem (CNSNews.com) - Arab leaders ended their two-day summit in Jordan late Wednesday united in their condemnation of Israel and support for the Palestinians, but failing to agree on a solution to the Iraq question.
They also expressed regret over a U.S. veto late Tuesday of a U.N. Security Council resolution that sought to send an unarmed international force to "protect" the Palestinians.
The leaders called for no new economic or political ties to be established with the Jewish state.
Palestinian Authority Chairman Yasser Arafat expressed his satisfaction at the outcome of the summit, which pledged financial and political support to the six-month-old Palestinian uprising.
Israeli Foreign Minister Shimon Peres called the summit's concluding stance a "stumbling block to peace" and said it would only add to tensions between the two sides. Israel had hoped for a moderate declaration but was condemned by the 22-member body instead.
"The leaders warned the Israeli government of the repercussions of its retreat from the foundations and the principles laid down [at an international Mideast peace conference] in Madrid in 1991," the final communique said.
Those "foundations" include an Israeli acknowledgement of the principle of ceding land in exchange for peace. Israel has ceded some 40 percent of disputed territory over the past seven years but in return is facing some of the worst terrorism in its history.
Peres noted in a statement that the "territories for peace" wasn't working, "because Israel will give territories and won't receive peace."
Israel had no desire to rule over another people, he said. It had tried to implement a series of actions to ease the situation of the Palestinian population.
Because Israel faced terror, this did "not change its will to bring peace to the entire region."
The Arab representatives said in their declaration that the American veto of a U.N. resolution to send observers to the region was regrettable.
The PA has been keen to draw other players in the international community into its conflict with Israel.
Israel Wednesday welcomed the U.S. move, saying a U.N. force would have aggravated the crisis.
"It is ironic that the members of the Security Council put forward an unbalanced position regarding the protection of Palestinian civilians precisely at this time, when Israeli citizens, victims of Palestinian terror, are being killed and injured," a Foreign Ministry statement said.
In Amman, Arafat received some of the emergency financial backing he has been calling for.
The leaders agreed to send $240 million in emergency aid over the next six months - $40 million a month - to help the PA pay its bills.
Israel has withheld millions of dollars of tax transfers to the PA in recent months, arguing that it could not be expected to pay the salaries of PA policemen who it accuses of planning and carrying out terror.
The move has been blamed for nearly bankrupting the PA, although Arab states too have withheld promised funds, for fear they would be swallowed up by widespread PA corruption.
The summit also backed an Iraqi offer to give $887 million to the Palestinians. An earlier attempt to do so was thwarted by the U.N. Security Council, which controls the proceeds from the sale of Baghdad's oil.
Old specters raised their heads at the summit, indicating a hardening of the Arab position. These included talk of a renewed Arab boycott against Israel, Syrian demonizing of the Jewish state and a renewal of relations between Arafat and Syria.
The summit moved a step closer toward implementing an Arab boycott against Israel. The decades-old embargo crumbled about 10 years ago as a result of the regional peace process.
On the sidelines of the conference, Arafat met Syrian leader Bashar Assad in the first official Syrian-Palestinian meeting in eight years.
In his speech to the assembly, Assad earlier extended a hand of peace to Arafat, who was never forgiven by Assad's father, the late Hafez Assad, for signing an interim agreement with Israel in 1993.
"Let bygones be bygones," Assad said in Amman. "We extend our hands to our Palestinian brothers to say that we stand by them now to serve the Palestinian cause."
The Syrian president accused Israeli society of being "more racist than the Nazis," because they had elected Prime Minister Ariel Sharon, who is hated by many Arabs.
The summit called for sanctions against Iraq to be dropped but could not resolve the disputes between Iraq and Kuwait, which Saddam Hussein covets and invaded in 1990.
The leaders charged Jordanian King Abdullah II, rotating head of the Arab League for the next year, with continuing to try to mediate between the two sides for the sake of Arab unity.