Gun battles rage in Bethlehem

Israel has reoccupied four West Bank cities in search of militants

Heavy gun battles have been raging between Israeli forces and Palestinian gunmen in the West Bank towns of Bethlehem and Ramallah.

Palestinian gunmen exchanged fire with Israeli tanks just a few hundred metres from Manger Square in the centre of Bethlehem and Israeli snipers took up position in the nearby Deheisheh refugee camp.

	Other developments: Israel fires shells into Lebanon in response to a rocket attack on northern Israel overnight Car bomb in Jerusalem kills the driver and an Israeli policeman on Monday Israeli sergeant killed near Bethlehem and 16 others wounded around the West Bank Palestinian gunmen shoot dead 11 suspected collaborators in Tulkarm on Monday

Israeli Prime Minister Ariel Sharon has said he does not rule out the possibility of exiling Palestinian leader Yasser Arafat, who is besieged in his Ramallah headquarters.

The Israeli army has reoccupied the West Bank towns of Qalqilya, Bethlehem, Ramallah and Tulkarm in an operation which it says is aimed at arresting Palestinian militants, following a series of deadly suicide bombings in Israel.

Click here to see a map of Bethlehem

Reports are coming in from Ramallah that some 300 people holed up inside the Palestinian security compound - headquarters to the West Bank security chief, Jibril Rajoub - have surrendered after a US-brokered ceasefire.

Reporting from Ramallah, the BBC's Barbara Plett says there were rounds of gunfire from Israeli soldiers who took up positions by her hotel, where all the journalists are staying.

It's going to be one-way ticket - he'll not be able to return

Israeli Prime Minister Ariel Sharon

Not far from there, tanks and helicopters fired on the Palestinian security compound for hours, before US mediation put an end to the siege.

Local reports said 300 Palestinians left the compound with their hands raised and surrendered to Israeli troops.

A Palestinian security official quoted by Israeli media said it had been agreed that the Palestinians would be detained for 24 hours to determine whether any of them are wanted by Israel.

Israel accused Mr Rajoub of sheltering dozens of fighters in his headquarters, but the security chief said the people inside the building were officials, women employees and three children.

Israel media reported that the army's main target in the compound was the commander of Fatah in the West Bank, Marwan Barghouti, who has been named in the past as a possible successor to Mr Arafat.

The Israeli army says it has made 700 arrests since moving into Ramallah on Friday.

Arafat extradition considered

Ariel Sharon says his army's actions are aimed at eliminating once and for all what he calls a terrorist infrastructure.

Rajoub said there were no militants in his compound

He told the European Union special envoy to the Middle East, Miguel Moratinos, that he did not rule out the possibility of exiling Mr Arafat.

Israel radio quoted Mr Sharon as saying that the cabinet had decided last week to isolate but not expel Palestinian leader, but he was now not sure if this was the right thing to do.

And Mr Sharon stated that if Mr Arafat was allowed to leave the Palestinian territories, he would not be allowed to return.

But a senior Palestinian official, Saeb Erekat, told the BBC that there were no circumstances under which Mr Arafat would accept exile.

US President George W Bush has urged Israel to keep open, as he put it, a pathway to peace.

And Israeli Foreign Minister, Shimon Peres, has called for "easing the siege".

Media ban

Ramallah is now a closed military zone, with troops ensuring Yasser Arafat's headquarters are off-limits to journalists.

The Israelis have met gunfire from Palestinian fighters

With the city under curfew, residents say they are running out of food.

Medical supplies are also low in the hospitals and the morgues are full because it is impossible to transport bodies to burial grounds.

The Foreign Press Association in Israel has protested strongly against the expulsion of an American television crew from Ramallah.

"Closing an entire city to the media indefinitely is an extreme and unjustified policy that makes it impossible for us to cover the important story unfolding here," it said.

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