Senior officials indicated that Israel has rejected the harsh demand of the United States to immediately leave Palestinian towns. State Department deputy spokesman Philip Reeker issued a statement yesterday stating that "Israeli defense forces should be withdrawn immediately from all Palestinian-controlled areas and no further such incursions should be made."

A senior government source responded, according to Ha'aretz, that Israel "will leave (the Palestinian territory) only when the goals of the operation have been achieved. We will not weigh any factor as more important than the security of Israeli citizens. We respect the United States, but we are acting as any other normal country would act. We will not apologize and will not bow our heads."

Prime Minister Ariel Sharon has so far refrained from commenting on the American demand. A statement issued last night by his office stated that Israel had no intention of reoccupying Area A. "The assassination of Minister Rechavam Ze'evi crossed a red line and Israel, like all democratic countries, is realizing its rights to self-defense and to protect the lives of its citizens," the statement said.

Defense Minister Binyamin Ben-Eliezer said today that the American demands were "baseless." During a tour in Israel's north, Ben-Eliezer said, "The government of Israel is the one responsible for insuring the existence and security of the state and its residents. In the meantime we hold in high regard and appreciate the United States. We have common strategy. But the things that came out of there, with all due respect - and we are not belittling it - have no place because we have no intention of remaining in the territories, conquering the cities, or [their] hilltops, " he said.

Israel has announced that the purpose of its operations in the West Bank is "to prevent terror acts and arrest terrorists, in view of the complete absence of efforts to prevent terrorism and arrest terrorists by the Palestinian Authority," a government source told Israel Television last night. In light of "warnings that terrorists were trying to carry out attacks within Israel," the government would "fulfill its obligation to defend its citizens," the source said.

Finance Minister Silvan Shalom (Likud) said today Israel had no choice but to remain in Palestinian-controlled territories until PA Chairman Yasser Arafat took serious measures against terrorism. "The fact that we are there, is seriously cutting down the possibility of a terror attack… we still have to remain there, until Arafat acts," he told Army Radio.

Reeker's statement stunned the Israeli government with its harshness: "We deeply regret and deplore Israel Defense Force actions that have killed numerous Palestinian civilians over the weekend. The deaths of those innocent civilians under the circumstances reported in recent days are unacceptable. We call upon Israel to ensure that its armed forces exercise greater discipline and restraint," he added.

Reeker also called on the Palestinian Authority of President Yasser Arafat to "do all in its power to halt violence and terror and bring to justice the terrorists whose actions are betraying Palestinian interests."

According to Yediot Aharonot, the decision by the Bush administration to issue the harsh demand for an Israeli withdrawal was due to information suggesting that Sharon was not planning to swiftly withdraw from Area A. Maariv reported that American officials have circulated position papers in which they charge that Sharon has reached a "point of no return," and has decided to bring about the total collapse of the Palestinian Authority.

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