WASHINGTON, June 5: Oil-rich Kuwait, rescued from Iraq in the Persian Gulf War. is a end Ing its participation in the 42-year Arab boycott of Israel. US and Jewish sources said Friday, reports AP.

This means companies that do business with Israel will not risk being blacklisted by the wealthy Emirate and can freely trade with both countries.

Presumably, it could even lead to Kuwait trading directly with Israel.

Secretary of State Warren Christopher urged an end to the boycott on his trip to the Middle East in March just as former Secretary of State James Baker had after a US-led coalition liberated Kuwait in the 1991 Gulf War.

Saudi Arabia, which had played a leading role in the boycott, responded to Baker by calling for a simultaneous end to Jewish settlements on the West Bank and Gaza.

Israel and Christopher declined to equate the two issues, but under Prime Minister Yitzhak Rabin construction of new government-financed settlements has ceased.

Saudi Arabia, meanwhile, has informed the United States it was not adding American com- panics to its boycott list, US officials said, speaking on condition of anonymity. They told the Associated Press that Saudi Arabia was not enforcing the boycott rigorously in any event

The Kuwaiti Foreign Minister, Sheik Sabah al-Ahmed, was quoted in April as saying plans were afoot to lift the embargo partially in his country. Since then, Germany "has made it illegal for German companies to cooperate with the boycott. The United States has a similar law since the 1970s.

Kuwait has now followed through by revising Its contracts and questionnaires to eliminate boycott-related questions, US Ambassador Edward Gnehm told Lester Pollack, chairman, and Malcolm Hoenlefn, executive vice chairman, of the Conference of Presidents of Major American Jewish Organizations. ’

Pollack and Hoenlein welcomed the assurances and thanked Christopher and Gnehm for their "concerted efforts." They called on all Arab states to end their participation tn the boycott

State Department officials, declining to be identified, confirmed the Jewish group's account

The embargo was enforced most aggressively by the Arabs after the 1973 Mideast War.