Gaza attack scrapped

Israeli Prime Minister Ariel Sharon retreated from a planned Gaza Strip offensive but faced a key policy battle yesterday within his Likud party over the question of Palestinian statehood.

Scrapping the plan, which was undermined by diplomatic pressure and dissent from generals, pushed the focus of the Israeli-Palestinian conflict back into the political arena for the time being.

But Defence Minister Binyamin Ben-Eliezer said Israel`s decision to shelve the assault should not be interpreted as surrender to "terrorism".

"We reserve the right to respond when we want and how we want," Ben-Eliezer said, touring the site near Tel Aviv of a Palestinian suicide bombing that killed 15 Israelis on Tuesday and triggered plans for the Gaza sweep.

On another front, Ariel Sharon faced a policy battle within his own party over the question of a Palestinian state at a heated Likud convention in Tel Aviv yesterday.

Supporters of former Prime Minister Benjamin Netanyahu in the Likud party said they would push a resolution through the central committee declaring the party would never support the creation of such a state.

Sharon has said he envisages a Palestinian state at the end of a long peacemaking process.

Likud officials raced to hammer out a compromise. If the resolution is passed at the forum, it could tie Sharon`s hands in future peace efforts and weaken his standing in Likud as Netanyahu gears up for an expected leadership challenge ahead of next year`s general election.

In the Gaza Strip, a Palestinian labourer shot dead his Israeli employer near a checkpoint leading to the Jewish settlement of Rafiah Yam, an army spokesman said.

Loudspeakers in the Gaza city of Rafah broadcast a claim of responsibility by the al-Aqsa Martyrs Brigades militant group for the attack.

In the West Bank, Israeli troops raided the city of Tulkarm and arrested two militants.

The incidents followed an easing of tensions on the Israel-Gaza border, where militants in the densely populated Strip had been preparing for a fight.

Israeli correspondents had reported that some generals had opposed a Gaza operation, warning of heavy Israeli army and Palestinian civilian casualties. Political sources said the offensive was aborted because details of the battle plan were leaked to the media.

David Magen, chairman of parliament`s foreign affairs and defence committee, said the real reason was Israeli fear of diplomatic fallout so soon after a sweep through the West Bank.

"I think the delay is due to political and other public reasons," he told Israel Radio.

Israel has been urged by US and other foreign leaders to eschew another military thrust to avoid burying new diplomacy, including a US initiative for a conference on peacemaking.

Diplomats said the shelving of a Gaza strike was a welcome extension to Friday`s resolution of an Israeli siege that lasted more than five weeks at Bethlehem`s Church of the Nativity.

Saudi Arabian Foreign Minister Prince Saud al Faisal cited a "ray of hope" for peace after the European-brokered deal in which Palestinian militants holed up in the church were sent into exile and Israeli forces left Bethlehem.

In Bethlehem yesterday, Christian Palestinians flocked to the church to pray at the traditional birthplace of Jesus for the first time since the end of the siege.

Cardinal Roger Etchegaray, envoy of Pope John Paul, and Latin Patriarch Michel Sabbah led hundreds of Catholics in prayers, urging Israelis and Palestinians to work for peace.

Cyprus, where 13 of the militants were taken temporarily, said yesterday it wanted them to leave by Wednesday. European Union foreign ministers are expected to decide today which of the bloc`s member states would take them.

Israeli commentators said a Gaza sweep could have caused friction with Washington at a time when US President George W. Bush has joined Sharon in urging reforms in the Palestinian Authority. The two men met at the White House last Tuesday.

Arab ministers said they had not ruled out supporting the Middle East peace conference proposed by Washington but were no closer to backing an idea which they said lacked clear goals.

The leaders of Egypt, Syria and Saudi Arabia, meeting in Egypt`s Red Sea resort of Sharm el-Sheikh on Saturday, affirmed a commitment to pursue a peace deal between the Arab world and Israel in exchange for an Israeli pullout from all land captured in the 1967 Middle East war.

At least 1,347 Palestinians and 474 Israelis have been killed since the Palestinian revolt against Israeli occupation began in September 2000.