Spain, Morocco strike island deal

Perejil is set to be left to the goats again

MADRID, Spain -- Spain and Morocco have resolved their dispute over a Mediterranean island, Washington says.

The settlement appears to return the island to the same status it enjoyed before last week's drama.

U.S. Secretary of State Colin Powell, who has been speaking to both sides in the dispute, welcomed the news.

Sources in Spain confirmed a deal had been reached on Saturday. Morocco was reported to being issuing a statement later.

The island, called Perejil (Parsley) by Spain, and Leila (Night) by Morocco, was occupied by Moroccan soldiers last week before being reoccupied in a peaceful operation by an elite team of Spanish commandoes.

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The Spanish sources told CNN that its crack team of between 30 and 50 soldiers could leave the island immediately as a result of the settlement.

Powell said in a statement: "The United States welcomes the understanding reached by Morocco and Spain over the island, following consultations by the United States with each side.

"In accordance with this understanding, the two sides have agreed to restore the situation regarding the island that existed prior to July 2002.

"We believe this understanding is in the interests of both countries and can serve as the basis for further steps in improving their bilateral relations."

A Spanish Foreign Ministry spokesman told CNN that Spanish Foreign Minister Ana Palacio will travel Monday to the Moroccan capital of Rabat.

Diplomatic activity had been extreme on Saturday in a reported attempt to resolve the issue before a European Union meeting of foreign ministers on Monday.

At one stage it looked like Morocco might insist on other disputed enclaves, including Ceuta and Melilla, coming up for discussion as part of an agreement over Perejil.

Powell made about 30 phone calls to Palacio and King Mohamed VI of Morocco as well as the foreign ministers of Morocco and Spain over the last two to three days.

Powell will send a letter to both sides documenting the agreement they reached, a senior state department official said.

Both Spain and Morocco have joint use of Perejil, a rocky island about the size of a football pitch off the Moroccan coast. Morocco uses the island to graze goats but it is believed to be a haven for drug smugglers.

Morocco claims Perejil as part of its territory, but Madrid says the island is Spanish and that the two countries had agreed years ago to leave it uninhabited. (Island facts)

It is believed the island will return to such a status.

Spain had warned it had no intention of entering a joint sovereignty agreement and that Ceuta and Melilla were not up for discussion.

Spain had taken the step of boosting its military presence on the Canary Islands, off west Africa, as well as the uninhabited Isla de Lobos, state radio said.

Perejil, Ceuta and Melilla have been a constant thorn in relations between the two countries for centuries, despite the two sharing trade links and considerable aid packages from Spain. Other issues of contention include fishing rights and immigration.