Associated Press Palestinian leader Yasser Arafat makes a speech during a meeting with Palestinian refugees in the Palestinian Authority government headquarters in the West Bank town of Ramallah, yesterday.

WASHINGTON - A message from Yasser Arafat to Secretary of State Colin Powell is raising hopes that the Palestinian leader will take a more aggressive stand on terror attacks on Israel.

"We did find it to be a positive letter, and we now look for action along the lines that he indicated in his letter," State Department spokesman Richard Boucher said yesterday while declining to reveal the letter's contents.

Hassan Abdel Rahman, the ranking Palestinian official in the United States, said Arafat did not say in the letter that he knew about an attempt to smuggle 50 tons of weapons from Iran.

"That's not the issue," Rahman said in an interview. "The letter is an attempt to put the whole issue of the ship behind us."

"It's a general letter that includes a road map to get us back to negotiations," Rahman said.

Diplomatic sources said the letter, sent last week through the U.S. consulate in Jerusalem, contained promises by Arafat that he would take steps against Palestinians involved in the blocked smuggling effort.

A senior U.S. official told reporters the Palestinian leader did not repeat his frequent denial that the Palestinian Authority arranged for the shipment, which Israeli commandos intercepted Jan. 3 in the Red Sea.

The official, speaking only on condition of anonymity, said Arafat offered assurance there would be no recurrence of the smuggling episode.

While declining to reveal the contents - or to say if Arafat had responded to Powell's demand that he acknowledge responsibility for the smuggling attempt - Boucher reiterated the U.S. allegation that "Palestinian Authority people were definitely involved."

Powell, meanwhile, spoke by telephone to British Foreign Secretary Jack Straw and German Foreign Minister Joschka Fischer, who are going to the Middle East. Boucher said Powell was trying to coordinate U.S. and European efforts to curb the violence that has stalled Mideast peacemaking.

On Saturday, European foreign ministers criticized the Bush administration's Mideast policy and offered a blueprint for reviving peace talks that envision the creation of a Palestinian state. It must be the starting point of the negotiating process, French Foreign Minister Hubert Vedrine said.

Last week, Israeli Prime Minister Ariel Sharon declared at a White House meeting with President Bush that he would support statehood, but only if terror ceased and negotiations succeeded.

Powell also has spoken in favor of Palestinian statehood while insisting that first Arafat do more to curb attacks on Israel.

Boucher said yesterday he was concerned about reports the Palestinians had acquired new rockets. Again, Boucher said the Palestinian Authority should take "strong and resolute action" to halt the violence.

At the same time, the U.S. spokesman expressed concern about Israeli attacks on Palestinian areas, including a prison facility, and on a U.N. office.

On the European criticism, Boucher was dismissive. He said accounts of the ministers' views differed and that the European Union had not taken a formal position.