Bethlehem snags blight Sharon talks

Israeli troops still occupy Manger Square

A deal to end the Bethlehem church siege has stalled because no country is willing to accept 13 of the Palestinian militants holed up inside, Israel says.

The snag dashed hopes of ending the five-week stand-off at the Church of the Nativity before talks between Israeli Prime Minister Ariel Sharon and US President George W Bush in Washington on Tuesday.

Preparations had begun for the Palestinians' release

The Israeli army had begun making preparations for the more than 100 people inside the church to be released, after Palestinian and Israeli negotiators agreed to send the militants into exile in Italy.

But the Italian Foreign Ministry said it had not been informed of the plan and it was at present out of the question for any of the Palestinians to be granted asylum in Italy.

An Israeli army spokesman, Captain Jacob Dallal, said: "The agreement is that they will go to another country, but right now we don't have a country".

The deal, which also involves the transfer of another 26 Palestinians to the Gaza Strip, came after 48 hours of talks mediated by the United States and the European Union.

Civilians, including nuns and priests, are among those in the church.

US-Israel talks

The failure to resolve the stand-off will be a blow to Mr Sharon as he meets President Bush to push his own blueprint for the region.

Sharon is seeking support from Bush to sideline Arafat

Mr Sharon is insisting that the Palestinian Authority should be reformed to make it less dependent on the will of Yasser Arafat.

But the US has made it clear that it still considers Mr Arafat the man to negotiate with.

"The president understands that Yasser Arafat is seen by the Palestinian people as their leader," said White House spokesman Ari Fleischer before the meeting, though Mr Bush is said to be interested in plans to overhaul the Palestinian Authority.

Mr Sharon is expected to argue that a long-term interim deal with the Palestinians should be worked out at a regional peace conference proposed by US Secretary of State Colin Powell.

He is also expected to hand over to the US president a collection of documents which officials say proves links between Mr Arafat and terrorist organisations.

The documents have been dismissed as "lies and fabrications" by leading Palestinians.

Italian objections

Mr Powell has phoned Italian Prime Minister Silvio Berlusconi in an attempt to smooth over Italy's objections to the Bethlehem deal.

What are the responsibilities of the hosting state? How must we keep them? In prison? In a convent? Are they free?

Italian Foreign Ministry official

A spokesman said he was "hopeful" the situation could be resolved.

But earlier the Italian Foreign Ministry - which Mr Berlusconi currently heads - said it had "never received any information from the parties about the process of the negotiations, nor were any requests advanced in the past few days from these parties".

Another potential problem has arisen with reports that there is now a dispute over the terms under which the Palestinian gunmen in the church will surrender their weapons.

The gunmen reportedly want written assurances that any weapons turned over to the Israelis will be returned after they leave Bethlehem.

 Click here for Bethlehem siege timeline

The Israeli Defence Minister, Binyamin Ben-Eliezer, has told the BBC he will withdraw all troops from Palestinian-controlled areas of Bethlehem once the siege is over.

That would effectively end Israel's military offensive in the West Bank - one of America's key demands from the Israelis.

However, he says that troops will have to stay in the West Bank in numbers, as he maintains there is a continuing threat of suicide bombers trying to enter Israel.