Bethlehem siege deal unravels

The dispute threatens a deal to end the siege

Hopes for an end to the five-week siege of the Church of the Nativity in Bethlehem have faded amid a dispute over the fate of 13 militants sheltering inside.

The new setback came as the Israeli army prepared Manger Square for the evacuation of most of the beseiged Palestinians. An earlier snag delaying an end to the stand-off had already been resolved.

If this (security) guarantee is not given, we will reject the deal and nobody will leave the church

Palestinian militant inside church

As negotiations continued, the Islamic militant group Hamas said some of its members had been arrested by Palestinian security forces acting on Yasser Arafat's orders. The crackdown followed a suicide bombing that killed 15 Israelis in northern Israel.

Israel army radio said the army began calling up emergency reservists on Thursday after the cabinet said Israel would retaliate for the attack.

Israeli military sources say that, according to intelligence reports from Gaza, more Palestinian suicide attacks are planned.

Setback

Last-minute talks to finalise an end to the siege broke down after Palestinians due to temporarily remain in the church demanded a European official be brought in to protect them as others inside are evacuated.

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Seeing babies that are critically injured, looking at pregnant women or old people that are injured... it is not so easy

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Under an agreement already worked out, 26 militants inside the church would be transferred to jail in Gaza, while about 80 Palestinians and international activists would be allowed to go free.

Thirteen Palestinians, whom Israel descibes as "senior terrorists," would stay in the church until they could be exiled to a foreign country.

Negotiations to resolve the latest impasse resumed on Thursday afternoon.

The Palestinians sought refuge in the church after Israeli troops stormed into Bethlehem on 2 April to root out militants from the city.

Militants arrested

In Gaza, Hamas officials said Palestinian police had arrested at least 14 militants on Thursday morning.

The detentions came after Yasser Arafat ordered his security forces "to confront and prevent all terrorist operations against Israeli civilians" after the attack on a social club in Rishon Letzion.

The bombing is believed to have been carried out by a Hamas member from Gaza.

However, correspondents note that in the past the Palestinian authorities have temporarily detained Hamas activists, but released them soon after.

Gaza fears

The BBC's Kylie Morris in Gaza says there is growing unease among Palestinians who fear an imminent Israeli strike there.

Arafat is under pressure from the US to crack down on militants

Israeli Transport Minister Ephraim Sneh told Israel radio the cabinet agreed "on the necessity of our troops intervening against the terrorist infrastructures in the Gaza Strip".

An Israeli Government statement said the cabinet on Wednesday night approved retaliation for the suicide attack, but it did not elaborate.

The West Bank has been the focus of recent Israeli military operations to root out Palestinian militants and the army has not so far entered Gaza on a large scale.

Israeli media said the suicide bomber came from Gaza, where Hamas' headquarters and senior leaders are based.