VATICAN CITY, Feb. 15 (RNS)--The Vatican and the Palestine LiberationOrganization (PLO) signed a historic agreement Tuesday calling forfreedom of worship in the Holy Land and condemning Israel's "unilateraldecisions and actions" concerning its disputed capital of Jerusalem.

The agreement, which came little more than a month before Pope JohnPaul II's scheduled pilgrimage to the Holy Land, March 20-26, is thefirst of its kind between the Vatican and an Arab entity.

"Unilateral decisions and actions altering the specific characterand status of Jerusalem are morally and legally unacceptable," a keysection of the agreement says in a clear reference to Israel.

At a 15-minute private audience after the signing ceremony, YasserArafat, president of the Palestinian National Authority (PNA), briefedPope John Paul II on "the most recent developments in the peace process"and expressed "concern over the present situation," Vatican spokesmanJoaquin Navarro-Valls reported.

Israel's negotiations with both the Palestinians and Syria have stalled.Arafat said he urged John Paul to add Jericho, one of the firstcities to be governed by the PNA, to the itinerary of his pilgrimagenext month to Jordan, Israel and the PNA-administered territory.

Navarro-Valls said the pope "agreed on the spot."

"God bless the Palestinian people," the Roman Catholic pontiff saidat the end of the audience.

Zvi Tal, spokesman for Israel's embassy to the Holy See, expressed"dismay" at the agreement. He said while the Vatican's position waswell-known, the signed accord amounted to interference in ongoing peacenegotiations between Israel and the Palestinians.

The Basic Agreement between the Holy See and the PalestineLiberation Organization "regulates some questions of a juridicalcharacter concerning the presence and the activity of the CatholicChurch in the territories of the Palestinian Authority," the Vaticanspokesman said.

In the 12 articles, the PLO affirms its "commitment to uphold andobserve the human right to freedom of religion and conscience" and theVatican its respect "for the followers of other religions." The PLO alsorecognizes "the rights of the Catholic Church in economic, legal andfiscal matters."

The agreement is intended to serve as the basis for future accordswith an independent Palestinian state. The Vatican and the PLOestablished official relations Oct. 26, 1994, following the Vatican'srecognition of Israel in December 1993.

Calling for "a peaceful solution of the Palestinian-Israeli conflictwhich would realize the inalienable national legitimate rights andaspirations of the Palestinian people," the agreement says thesettlement must be based on international law, United Nations SecurityCouncil resolutions, "justice and equity."

A third of the preamble concerns the long-disputed status ofJerusalem and its holy places sacred to Jews, Christians andMuslims.

The document reiterates the Vatican's demand, rejected by Israel,for an internationally guaranteed "special" status for Jerusalem tosafeguard the holy places, ensure access to them and preserve "theproper identity and sacred character of the city and its universallysignificant religious and cultural heritage."

"An equitable solution for the issue of Jerusalem, based oninternational resolutions, is fundamental for a just and lasting peacein the Middle East," it says.

Israel declared Jerusalem to be its indivisible and eternal capitalafter annexing Arab East Jerusalem in the 1967 Middle Eastwar. The PLO wants to establish its capital in East Jerusalem and hassharply criticized recent Israeli construction in the area.

Arafat, speaking in Morocco on Monday, appealed to Muslimstates for funds to save East Jerusalem from "cancerous Judaization."

The agreement's preamble calls for a "regime of status quo" in thecity's holy places, and Article 4 says, "The regime of the status quowill be maintained and observed in those Christian holy places where itapplies."

The status quo has been threatened in Nazareth as well as inJerusalem in recent months. Catholic and other Christian leaders havehotly protested Israel's approval of plans for construction of a mosquein Nazareth beside the Basilica of the Annunciation, which stands on thesite of what tradition holds is the spot where the angel Gabrielannounced to the Virgin Mary she would conceive Jesus.

The agreement was signed by Monsignor Celestino Migliore, theVatican's undersecretary of state for foreign relations, and EmileJarjoui, a member of the PLO Executive Committee, who led the PLOdelegation in two years of negotiations.

On his pilgrimage to the Holy Land to celebrate the start of thethird millennium of Christianity, the 79-year-old John Paul is scheduledto visit Mount Nebo in Jordan, Palestinian-ruled Bethlehem, the Mount ofBeatitudes in northern Israel, Nazareth and Jerusalem.

The pope also will travel to Egypt Feb. 24-26 to visit the traditional site of Mount Sinai.