"If there will be complete quiet for 48 consecutive hours," Sharon said, "the foreign minister will meet Arafat in order to advance the process of the cease-fire, to bring about seven days of calm which are a precondition to beginning the Mitchell program."

Arafat, in response, told reporters in Gaza that he was ready and willing. "I am ready to meet Mr. Peres any time, any place if that will help to push the peace process in the Middle East."

Israel Radio reported that Peres told a meeting of Labor ministers Sunday that Sharon's condition for the meeting was acceptable to him. At the same meeting, Defense Minister Benjamin Ben-Eliezer said that Arafat has ordered the PA security forces to reduce the level of shooting. Peres also claimed that the Palestinians were trying to quiet the situation.

The softening of Sharon's position reflected internal and external pressure. Peres had hinted that he would leave the unity coalition over Sharon's refusal to allow him to meet Arafat, and Sharon was being firmly requested by the Bush Administration to permit the meeting.

Prime Minister Ariel Sharon met Saturday night with Foreign Affairs Minister Shimon Peres at his Sycamore Ranch in the western Negev to discuss Sharon's order to cancel Peres's planned Sunday meeting with Palestinian Authority Chairman Yasser Arafat. The meeting ended in disagreement, and recriminations between the two. Peres said Sharon's refusal to agree to the American request to meet with Arafat would place Israel in the "rejection front" and the Palestinians in the "approval front."

The United States is pushing for a Peres-Arafat meeting to neutralize the Israeli-Palestinian conflict so that it doesn't interfere with the planned anti-terror war. Administration officials that a renewed dialogue would facilitate the building of an anti-terror coalition that included the Palestinians. President George W. Bush called Sharon on Friday and stressed the importance of such a meeting, following a similar call by U.S. Secretary of State Colin Powell the day before.

Although Bush told Sharon that he hoped the Prime Minister would support holding the meeting, Sharon said that a meeting at present would harm Israel's interests. During the exchange, Bush also thanked Sharon for Israel's support after the terror attacks in the U.S. But Israeli Television quoted American officials as saying the conversation was "difficult and unpleasant."

According to Ha'aretz, Sharon told Bush that Arafat began carrying out terror attacks 30 years ago, when he hijacked planes and murdered eleven Israeli athletes at the 1972 Munich Olympics. Sharon said that Arafat stood at the helm of a terrorist organization and that immediately following the attacks in the U.S., he had asked Arafat to desist from carrying out terror attacks, but that the PA chairman did not respond.

Peres was reportedly furious about the cancellation of the meeting. Israel's Channel Two television reported Friday evening that the national unity government was in danger. Ha'aretz reported that Sharon did not discuss the decision with him. Peres vowed to push ahead with his plans to discuss a cease-fire with Arafat, even though most of Labor Party ministers reportedly oppose the meeting. In an apparent effort to win their support, Peres demanded that the PA chairman order an end to terror attacks, a Peres aide said, although it remained unclear whether the new demand was a condition for the meeting to be held.

No let-up in violence in West Bank, Gaza
Heavy fighting continued on the West Bank and Gaza Friday night and Saturday morning. IDF Radio reported that IAF helicopters attacked a Palestinian intelligence outpost north of the Gaza Strip settlement of Netzarim, with ground troops firing missiles at a Palestinian navy post in the same area. IDF ground troops also opened fire on a Palestinian police outpost in Rafah.

The actions followed Palestinian mortar and grenade attacks on IDF troops and settlements in the area Friday. Two members of the Border Police were injured in an attack at the Erez checkpoint, one suffering moderate-to-serious injuries and the second light injuries, after grenades were thrown at the checkpoint.

Overnight, an IDF force consisting of tanks, APCs and bulldozers entered the northern Gaza town of Beit Hanun, destroying Palestinian security installations. Palestinian sources claimed that two Palestinians were killed and 11 injured in the ensuing firefight. No IDF soldiers were injured.

Voice of Israel radio reported that bombs exploded near IDF troops near Nablus and in the kasbah area of Hebron in the West Bank. There were no injuries in either incident. Earlier Friday, Palestinian media reported that the IDF renewed gunfire on Jenin, but did not enter the town as it had earlier in the week. The IDF denied reports that it had entered Palestinian-controlled territory near the West Bank town of Ramallah Friday night, but claimed that Palestinian gunmen opened fire upon IDF soldiers south of the town and near the adjacent settlement of Psagot.

Peres drifts toward opposition
Following his two conversations with Powell, ynet reported, Peres had said that "if it was possible to put aside the Palestinian issue or resolve it in a positive way, that would ease the American efforts to form an anti-terror coalition."

Echoing Peres, Meretz party chairman Yossi Sarid said Saturday that his faction supported the meeting with Arafat. According to Ha'aretz, Sarid said Israel would be making a mistake if it appeared to be the one to oppose the American front against terror. Meretz MK Zahava Gal-On called upon Peres to leave the government if Sharon continues to refuse permission for a meeting with Arafat.

Ha'aretz quoted a senior source in the Prime Minister's Office as accusing Peres and his aides of trying to ensure that there was international pressure on Sharon to allow the foreign minister to meet with Arafat.

Channel Two television reported unusually harsh criticism of Peres's push for an Arafat meeting by senior IDF officials. One source said that Peres was supplying the "soap" that would enable Arafat to clean off the mud of his terrorist association, undermining Israeli efforts to isolate the Palestinian leader as a terrorist who cannot be trusted.

Channel Two's Ehud Yaari also reported that the United States is seeking to include the Palestinians and Syrians in the American-led anti-terrorist coalition, while expecting Sharon to behave with the kind of restraint demonstrated by Former Prime Minister Yitzhak Shamir during the 1991 Gulf War. During that American-led campaign, 39 Iraqi SCUD missiles went unanswered by Israeli forces.

Palestinian officials, meanwhile, were demanding that the meeting between Peres and Arafat include European representatives, and that political and diplomatic issues be on the agenda, along with discussion of the proposed cease-fire.

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