PLC speaker: Arafat signs law on Jerusalem as future capital.

RAMALLAH - Palestinian Authority Chairman Yasser Arafat signed a law Saturday formally declaring Jerusalem to be the capital of a future independent Palestinian state, said the speaker of the Palestinian Legislative Council Abu Ala (Ahmed Qureia) said.

"President Arafat signed the 'Jerusalem The Capital' law stipulating that Jerusalem is the capital of a future independent state and the center of the legislative, judicial and executive authorities," said Abu Ala.

He said Arafat decided to sign off on the bill, which was passed by parliament two years ago, in response to a demand by the U.S. congress that the United States recognize Jerusalem as Israel's capital.

Arafat called the law Bush signed a "catastrophe," and Palestinians and Arabs saw it as a biased move backing Israel's claims to the city.

Although Palestinians have long stated their intention to make East Jerusalem their capital, the new law is for now symbolic only, as Israel has full control over both parts of the city and Prime Minister Ariel Sharon has pledged not to re-divide it.

The Palestinian leader has often spoken of the Palestinians' determination to make Arab East Jerusalem the capital of a future independent state. The PLC was due to discuss the new U.S. law in a special session Sunday.

It was not immediately clear what difference, if any, the signing of the law would have on Palestinian Authority transactions or documents.

Sharon spokesman Ra'anan Gissin dismissed the Palestinian legislation as meaningless.

"It's all on paper," he said. "It has about as much real meaning as the cease-fire declarations he keeps signing."