"Some people will see this as an important step; others won't," said one diplomat familiar with the issue.

"They sent experts," a diplomat familiar with the talks said, referring to the Soviet side.

"I worry about this one," said a foreign diplomat familiar with the intelligence.

"The proxy game is over," said a senior Western diplomat familiar with all sides in the conflict.

An Asian diplomat familiar with the administration's thinking echoed that view.

"I don't think Deng has personally asked for it," said a diplomat familiar with the financing programs.

"It's significant," a European diplomat familiar with the report said of the new pledges.

But another diplomat familiar with the Saudi proposal said it was "absolutely still a valid idea."

A recent study has shown significant malnutrition among Palestinian children, diplomats familiar with its results said.

"The technical aspects have been completed," said a diplomat familiar with the negotiations.