Israeli troops pull out of Nablus, most of Ramallah

Israeli tanks rumbled out of two West Bank cities yesterday after a crushing three-week occupation but kept up sieges of Yasser Arafat`s headquarters and a Bethlehem church where gunmen are holed up.

"We have finished this stage of the operation called Defensive Shield," Israeli Prime Minister Ariel Sharon told reporters in Jerusalem.

Amid continued international outcry in some quarters over Israel`s policy, the army said it had left Ramallah, apart from the Palestinian president`s compound, and pulled out of Nablus.

Palestinian negotiator Saeb Erekat slammed Israeli pullbacks as a "big deception", saying Israel still had security control of all Palestinian-ruled parts of the West Bank.

Sharon launched a rolling reoccupation of West Bank towns and refugee camps on March 29 after a series of suicide bombings that killed scores of Israelis.

Dazed Palestinians now free of Israeli curfew emerged from their homes to piles of garbage, smashed shops and streets chewed up by tank tracks.

US Secretary of State Colin Powell, who failed to win a truce during a Middle East mission that ended on Wednesday, said he would ultimately like to see Israeli units that have been redeployed around Palestinian cities back in their garrisons.

"And I would like to see the cities opened up, so that we can start to see normal life resume and so that there are no restrictions with respect to the provision of humanitarian aid," Powell added on CBS television`s Face the Nation.

Powell also repeated his call for Arafat to lead his people to a negotiated settlement.

Palestinian leaders said the offensive caused hundreds of casualties, wiped out Arafat`s security services and wrecked many of the nascent institutions of his Palestinian Authority.

Sharon said the campaign achieved significant results, pledging that Israel`s "struggle against terrorism" would go on.

"However this time, it will work according to a different method," he said.

Sharon was apparently referring to buffer zones which he wants to establish inside the West Bank to prevent Palestinian suicide bombers from reaching Israel.

In Bethlehem, troops remained locked in a stalemate with wanted Palestinian militants trapped with more than 200 policemen, clerics and civilians inside the Church of the Nativity.

With tanks still encircling Arafat in his battered headquarters in once-thriving Ramallah, and nearby residential streets blocked off by Israeli barriers of earth and wrecked cars, people in the city had little to smile about.

"They left from the door and they will come back through the window," 85-year-old shopkeeper Hassan Abu Darwish said.

The scale of devastation, especially in the Jenin refugee camp, has provoked ferocious criticism from abroad and an exchange of accusations between Israel and the Palestinians.

The European Union`s External Relations Commissioner, Chris Patten, accused Israel of "hijacking" the US-led war on terror and said in a BBC interview that its crushing use of force against Palestinians would prove counter-productive.

Political sources said Israel was considering blackballing UN Middle East envoy Terje Roed-Larsen for what it sees as his pro-Palestinian bias over events in Jenin, described by the Israeli army as a terrorist bastion.

On Thursday, Larsen accused the army of using "morally repugnant" means in its assault on the camp. Larsen, a Norwegian who helped broker Israeli-Palestinian interim peace deals, later said his comments did not mean he was accusing Israel of committing a massacre, as Palestinian officials have alleged.

Israel promised on Saturday to cooperate with a UN Security Council mission to discover what happened in the Jenin camp, scene of the fiercest battles of the offensive. Israel denies its troops committed a massacre.

The head of the UN agency for Palestinian refugees told Reuters that 800 dwellings had been destroyed and many more damaged in the Jenin camp, making 4,000 to 5,000 people homeless.

"Certainly there is evidence of overwhelming and apparently disproportionate use of force, even if a battle was going on in Jenin camp," UNRWA Commissioner-General Peter Hansen said.

Mohammed Abu Ghali, director of Jenin hospital, said the body count from the camp had risen to 45. He stood by his earlier estimate that the final toll might be 300 to 400.

Israeli officials say a few dozen people, mostly militants, were killed in Jenin, along with 23 Israeli soldiers.

Defence Minister Binyamin Ben-Eliezer said Israeli forces would stay outside Arafat`s compound until three men accused of killing an Israeli cabinet minister last year were turned over.

Israel also wants the handover of Arafat`s chief financial officer, Fuad Shubaki, whom it suspects of trying to smuggle arms from Iran into the Palestinian territories.