"The president believes no matter what decisions are made vis-a-vis attendance, this should not be a lost opportunity for those who are there," White House spokesman Ari Fleischer said. "They should still focus on how to create peace in the Middle East, regardless of anything involving attendance."

In an interview published Tuesday by the Lebanese daily "An-Nahar", the Egyptian President, who, by deciding not to attend the Summit, had dealt a blow a blow to the two-day summit said that there was a major risk of the Israelis making it impossible for Arafat to return once he was out of the Palestinian territories.

In fact, Mr. Ariel Sharon, the hard line Israeli Prime Minister who had held the Palestinian leader prisoner in Ramallah for more than three months said he would not allow Mr. Arafat to come back to the areas if during his absence terrorist operations are launched in Israel.

"What will Arafat be doing at the summit? Will he be satisfied drinking tea? Of course he will talk about what is happening and they (the Israelis) will consider his statement as incitement", Mobarak declared.

Mr. Arafat said he would stay put because Israeli preconditions for freeing him from confinement in the West Bank city of Ramallah were "unacceptable". Aides to Arafat said Israel's insistence on the right to veto his return from the Summit was "the most objectionable condition".

Saudi Crown Prince Abdollah and Syrian President Bashar al-Assad were among key figures to fly into Beirut.

Egyptian Foreign Minister Ahmed Maher confirmed that President Hosni Mobarak would not attend the summit that opens Wednesday.

"There are domestic commitments in Cairo and he (Mobarak) appointed the prime minister () to represent him at this summit," Maher told reporters in Beirut.

Delegates said the news surprised and disappointed summit participants, including host Lebanon and Palestinian delegates who had expected Mobarak to come in person to lend the support of Egypt, an Arab heavyweight, to the Saudi plan.

In the Al Nahar interview, Mr. Mobarak said he was convinced that the two-day summit beginning Wednesday would approve a Saudi initiative for concluding peace with Israel, but he predicted that Israel would reject it.

After losing political ground to opposition Islamic radicals who spearheaded the Intifada (uprising) in the early going, Arafat has achieved virtual folk hero status among his people since being marooned in Ramallah by Israeli tanks.

Arafat and Sharon fought a deadly war twenty years ago in the city of Beirut, where Sharon, then an Israel General, had drove his tanks right in the heart of Beirut to capture the leader of "Al-Fattah" organisation that had wowed to recapture Palestine from the Israeli occupiers.

The Egyptian leader expressed support for the Saudi initiative, which offers Israel peace with Arab states if it withdraws from all Arab territory occupied since the 1967 Middle East war and there is a just solution to the problem of Palestinian refugees.

"But I have no confidence in Israel, and I don't believe it will accept it", he told Al Nahar.

Iranian and Arab analysts said they hope the Saudi proposal would be adopted despite the absence of both Mr. Arafat and Mr. Mobarak, as it has been already endorsed by Arab foreign ministers and is perhaps the last chance for a peace between Arabs and Israel.

The overture of Saudi Arabia’s Crown Prince Abdullah gathered momentum Monday, when foreign ministers ironed out the final wrinkles in the draft to preventing disagreements when Arab kings, princes and heads of state arrive Tuesday.

The day had started with Nabil Shaath, the Palestinian minister of international co-operation, telling reporters that the chances of the Palestinian president’s participation in the summit event were "minimal".

Arab foreign ministers had meantime finalised the drafts of the "Arab Peace Initiative" and the "Beirut Declaration" ahead of their leaders meeting for endorsement.

The ministers managed to find compromises for two of three main agenda items where disputes were rather significant:

At the insistence of the Syrian and Lebanese delegations, a clause calling for a "fair solution" to the plight of refugees was amended to include "in conformity with UN General Assembly Resolution 194." However, the Lebanese delegation remained unsatisfied, because the resolution calls for the repatriation or compensation, which could mean the settlement of some of the 360,000 Palestinians already on its land.

Lebanese Foreign Minister Mahmoud Hammoud, briefing reporters after marathon meetings, said that "if Israel fulfills all its obligations according to international law, the Arabs would be able to determine the level of relations we would establish with it".

"The summit is critical because the international and regional situation is critical, and we as Arab states and societies face a position that is not in our favor at the level of international developments", he said.

"It is either justice, peace and progress or chaos and confrontations that keep on escalating toward unpredictable results," he said.

He referred to potential attacks on Arab countries in the US-led war on terrorism, and said a propaganda onslaught was targeting the Islamic culture in the post-11 September political environment.

The less flexible Beirut Declaration, which the Jordanians viewed as a contradiction to the conciliatory initiative, would also include outright support for the Lebanese resistance and the Palestinian intifada, and pledge $330 million in financial support for the Palestinians.

A working document presented by the Iraqi delegation offered for the first time since the 1990 Gulf crisis an unequivocal recognition of Kuwait’s "independence" and "sovereignty." It was apparently Baghdad’s reward for Kuwait’s public opposition to a potential US military strike against Iraq.

However, the proposed resolution underlines the Arab leaders’ emphatic opposition to "the use of force against Iraq," a reference to the US threats of a military strike if Baghdad did not allow the return of weapons inspectors to the country.

Libyan leader Colonel Moammar Gadhafi confirmed in an interview with the Qatar-based Al-Jazira satellite television channel that he would not personally come to Beirut, but wished the summit "success".