Foreign Minister Amr Moussa, in New York to attend the 53rd session of the UN General Assembly, said yesterday Egypt continues to give priority to "activating the US initiative" for a second redeployment in the West Bank. But this, he added, should be done "in a balanced fashion, that is, by reaching an agreement satisfactory to both sides." Moussa, who will deliver Egypt's speech to the Assembly tomorrow, said that the Arabs were talking about "mutual commitments that should be respected by all sides." The Arabs are also demanding guarantees that these commitments be implemented on the ground, Moussa asserted. Hopes for a breakthrough in the 18-month deadlock in Middle East peace-making will be tested as Secretary of State Madeleine Albright meets with Israeli Prime Minister Binyamin Netanyahu, with a parallel anticipated session with Palestinian leader Yasser Arafat. Albright would like to see the two leaders conclude a long-delayed accord for further Israeli withdrawal from the West Bank. Last week she said American mediator Dennis Ross had made steady progress in shuttling between the two sides. Albright and Netanyahu are already in New York for the General Assembly session. Arafat is expected on Sunday. Netanyahu had stressed security issues, insisting that Arafat take tougher measures against Islamist hard-liners and demanding that all anti-Israeli references in the Palestine Liberation Organisation's covenant be annulled. In return, Netanyahu is prepared to withdraw from 13 per cent of West Bank territory, provided that three per cent of this area remains as a "nature reserve" under Israel's security control. Arafat insists that the entire 13 per cent area should be under Palestinian or joint control. Arafat has also declared determination to proclaim an independent Palestinian state by next May, triggering warnings from Netanyahu of a possible Israeli takeover of self-rule territories. In a telephone conversation Tuesday ahead of his arrival in New York, Netanyahu informed Albright that there has been some progress in the peace talks with the Palestinians. Netanyahu's spokesman Aviv Bushinsky said the progress concerns the disputed three per cent area. The State Department has not ruled out a possible three-way meeting in New York involving the US, Israel and the Palestinians. And Netanyahu's senior aide David Bar-Illan said that a summit was a possibility that could signal significant progress after the 18-month stalemate. Arafat said on Saturday that he was "ready to hold such a meeting." While US officials said they were somewhat more optimistic, they were cautious about a deal given the protracted difficulties of the Israeli-Palestinian relationship. Some officials also noted a potential complication in the negotiations arising out of the politically weakened position of President Bill Clinton, under fire for his affair with former White House intern Monica Lewinsky. The officials noted speculation in the Israeli press that Netanyahu may be unwilling to sign a peace deal now because it would constitute a boost for Clinton and anger the Israeli leader's Republican allies in Congress who are pushing for Clinton's resignation or impeachment. For his part, Moussa told reporters the Egyptian-French initiative for an international peace-saving summit does not run counter to the American initiative. "We are working to assist the American initiative and we hope that this initiative will reach the required goal, which is a balanced and just agreement." Asked whether and when the Egyptian-French initiative will be activated, Moussa responded: "When we feel that the American initiative will not produce results, particularly following the meetings that will be held in New York and Washington within the coming few days." Moussa was expected to have separate meetings, on the fringe of the Assembly session, with Netanyahu and Albright. In his address to the Assembly tomorrow, Moussa would affirm the "fundamentals" of Egyptian foreign policy concerning Middle East peace-making, banishing weapons of mass destruction from the region and a concerted international effort to fight terrorism, Egyptian diplomats said. Moussa will also make it clear that Egypt opposes continuing sanctions against Iraq, Libya and Sudan without a specific time frame, the diplomats added. In another development, Egypt and seven other countries pressing for a nuclear weapon-free world said yesterday they are not giving up their campaign because of recent nuclear tests by India and Pakistan. The eight non-nuclear countries said they want nuclear powers to follow South Africa's example and dispose of their nuclear arsenals. A proposal in this connection will be submitted to the Assembly for debate, Moussa said. Hoda Tewfik in New York, Wire dispatches