Jun 27, 2002 5 min read

KANANASKIS, Alberta (AP) – In the isolation of a heavily guarded mountain retreat, world leaders challenged President Bush’s call for Yasser Arafat’s ouster at a summit shaken by new economic tumult Wednesday. Bush found scant outright support among Group of Eight leaders as he renewed his demand that Palestinians “make right decisions” and elect a new leader.

British Prime Minister Tony Blair came closest to the U.S. position – “there has been an attitude towards terrorism” under Arafat – while other leaders steered far clear of denouncing Arafat as they gathered in secluded serenity at a Canadian Rockies resort.

“With regards to the head of the Palestinian authority it is, naturally, for the Palestinian people – and them alone – to choose their representatives,” French President Jacques Chirac told reporters.

The Mideast crisis consumed a large portion of closed-door talks on the first day of the summit, despite Canadian Prime Minister Jean Chretien’s wish to focus on African aid, the global economy and terrorism.

In a grim reminder of threats posed by terrorism, camouflaged soldiers, tanks and anti-aircraft missiles stood guard over the green valleys and craggy peaks encircling the resort where Bush and his seven counterparts met.

They released a three-page agreement that seeks to combat terrorism by improving transportation security. The accord makes no immediate advances, but commits the nations work together on a series of initiatives such as new standards for reinforcing cockpit doors.

While the presidents and prime ministers easily formed a consensus against terrorism, they remained divided on other points, including Bush’s trade and Middle East policies. Leaders sought vague agreement on African aid and efforts to help Russia manage its nuclear stockpile.

The sluggish U.S. economy also squeezed its way into the talks after Bush said a series of corporate scandals had helped weaken American markets.

“There are some concerns about the validity of the balance sheets of corporate America – and I can understand why,” Bush said.

“We’ve had too many cases of people abusing their responsibilities.”

The remarks were prompted by news that telecommunications giant WorldCom Inc. misstated its earnings by $3.8 billion. The revelation, which Bush called outrageous, rocked world economic markets.

“We will fully investigate and hold people accountable for misleading not only shareholders but employees as well,” Bush said.

Kept more than 60 miles from the summit site, anti-globalization protesters were less violent and turned out in smaller numbers than at past summits.

In relative solitude, the leaders tinkered with an African relief plan they expect to release Thursday. A senior German official said there was still debate over the percentage of overall foreign aid that each nation should dedicate to the continent.

Some countries want the bar set at 50 percent – a goal that other nations, including the United States, might find unrealistic.

With most of the sessions closed to the public, the leaders tried to make the best of their rare open sessions. Bush told reporters said he had bumped into the British prime minister working out in the gym.

“An impressive regime,” Bush said.

“You looked in pretty good shape yourself this morning,” Blair replied.

On the Middle East, Chirac called for an international peace conference, a position at odds with Bush who has dropped talk of such a session until violence ebbs in the Middle East.

Bush advisers said the president doesn’t disagree with Chirac and other European leaders who, traditionally more sympathetic to the Arab position, say that Palestinians – not America or its allies – must choose their government heads. U.S. officials said Bush won’t interfere with Palestinian elections next year, even if Arafat is re-elected.

In one private session, according to a Canadian official, a leader asked who would decide whether Palestinian election results were legitimate.

Faced with the same question in his meeting with Blair, Bush replied, “The free world, the people that are going to be asked to put up money” to get the new Palestinian state on its feet.

“I can assure you we won’t be putting any money into a society which is not transparent and corrupt,” he said.

In a departure from most allies, Bush is warning Palestinians they cannot earn his support for statehood unless Arafat is thrust from power.

“That status quo is simply unacceptable, and it should be unacceptable to them,” Bush said.

Blair gave that position a nod.

“It’s not a question of saying we’re going to tell people who they elect or not election. That’s for them,” Blair said. “But it’s for us to say the consequences of electing people who aren’t serious negotiating partners is that we can’t move forward.”

Chretien welcomed each guest one-by-one beside a small waterfall.

Russian President Vladimir Putin won for his country the right to play host to its first G-8 summit, in 2006. Putin is also hoping to win support for a program in which the United States, matched by other wealthy countries, will provide $10 billion over the next 10 years to help Russia decommission its nuclear stockpile.

U.S. officials said they expect a vague statement of principles rather than a full-fledged accord.