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On the 30th anniversary of the 1967 Six-Day War’s opening volleys, Israeli Prime Minister Benjamin Netanyahu Wednesday outlined his vision of a permanent peace settlement with Palestinians that would keep all of Jerusalem united under Israeli sovereignty.

As thousands of Israelis celebrated “Jerusalem Day,” Netanyahu briefed his inner Security Cabinet for the first time on his blueprint for the future–one that brushes aside key PLO demands and calls for Israel to hold on to large parts of the occupied West Bank.

Senior aides to PLO Chairman Yasser Arafat assailed the plan as a decision to suppress and dominate Palestinians living in disputed East Jerusalem, captured by Israel in 1967 and claimed by both Israel and the PLO as their capital.

The Palestinian leaders also condemned an announcement that 400 more police will be stationed in Jerusalem’s Arab eastern districts to solidify Israeli control there.

Addressing the Knesset on the day Israelis commemorate their triumph and honor those killed in the 1967 war, Netanyahu declared, “The main meaning of this victory is that Jerusalem will remain united and whole under Israeli sovereignty for eternity.”

The new leader of Israel’s main opposition Labor Party, former Army Chief of Staff Ehud Barak, marked the occasion by praying at the grave of his mentor, assassinated Labor Prime Minister Yitzhak Rabin, and vowing to continue Rabin’s legacy of peacemaking.

Barak, Israel’s most decorated soldier, was elected chairman of the Labor Party by just over 50 percent of the vote in Tuesday’s election, according to final returns, pitting the former tank commander against Netanyahu in the next elections, scheduled to be held by 2000.

Barak said he would push for early elections, perhaps as soon as 1998, to oust the Likud prime minister, a man he once commanded in an elite army unit.

After Israel’s 1948 war of independence, Israel held only West Jerusalem as its capital.

Battle-hardened Israeli soldiers who stormed the Old City on June 7, 1967, two days into the Six-Day War, wept tears of joy when they took control of the Western Wall, Judaism’s holiest shrine and the retaining wall of its ancient temple.

“Every Jew has dreamed of this for 2,000 years,” remarked Teddy Kollek, the Israeli mayor at the time, as the battle for East Jerusalem was being fought.

But Arabs still consider Israel’s presence on the disputed east side of the city a military “occupation.”

Under the 1993 Oslo agreements, Israel and the Palestine Liberation Organization agreed to negotiate the final status of Jerusalem, Jewish settlements, Palestinian refugees and borders by May 1999.

But Arafat, the Palestinian president, walked out of the peace talks after Netanyahu’s Cabinet ordered bulldozers to break ground March 18 on 6,500 units of Jewish housing in East Jerusalem.

The battle for the city and other territory in a permanent peace pact is in full swing.

At the Security Cabinet Wednesday, Netanyahu sketched his vision of a final settlement that would allow Israel to retain security and general control over the Jordan Valley and its current eastern border with Jordan along the Jordan River.

While Palestinians would be permitted self-rule in various parts of the territory, Israel would forbid them from maintaining an army there, Israel Radio said.

Israel would seek to keep control over the entire city of Jerusalem and extend permanent control to include major Jewish settlements in the surrounding West Bank.

These would include strategic areas such as Gush Etzion in the south, Maale Adummim in the east and Givat Zeev in the north, and an expanded Jerusalem corridor would link the greater Jerusalem area westward through the West Bank to the coastal plain, Israel proper and Tel Aviv.

Ahmed Tibi, a senior aide to Arafat, said the principles suggested by Netanyahu represent a plan for confrontation, not peace, and vowed that the Israeli leader would not succeed in forcing such plans on the Palestinians.

Leaders of Jewish settlers’ groups also protested, fearing that the discussion of settlement areas might mean the government could abandon more isolated or far-flung settlements.

Some 140,000 Jewish settlers live among more than 2 million Palestinians in the West Bank and Gaza Strip.

Israel’s annexation of East Jerusalem, including the Old City, following the 1967 war has never been recognized internationally.

Right-wing Israelis and students carrying Israeli flags marched through Arab areas of the city Wednesday, but no violence was reported.