Israel rockets Hebron compound

Troops keep watch during a break in the bombardment

Israeli attack helicopters have fired at least four rockets at the Palestinian Authority headquarters in Hebron, where wanted Palestinians are sheltering.

Hours earlier, tanks and helicopters strafed the compound with machine-gun fire, as troops besieged the fortress-like building for a third day.

Hebron compound

British army base until 1948

Jordanian Army base until Israelis captured West Bank in 1967

Israelis turn most of Hebron over to Palestinians in 1997

Palestinians turn compound into local authority and security forces base

Israel says about 40 people, including 15 militants from the Tanzim - an armed group within Palestinian leader Yasser Arafat's Fatah faction - remain inside the complex.

The army says about 150 people, including at least 20 wanted men, have surrendered since Israeli forces surrounded the so-called moqataa building on Tuesday.

Israel radio said a member of the militant Lebanese Hezbollah movement was among a group of 20 who gave themselves up.

Hebron is one of seven Palestinian centres in the West Bank taken over by Israeli forces after two suicide attacks in Jerusalem last week which killed 26 Israelis.

Bush downplays differences

As the assault intensified, US President George W Bush played down divisions between the US and Europe over his call for the Palestinians to replace Yasser Arafat.

Bush has called for Arafat to be replaced

Speaking at the Group of Eight (G8) summit of the world's leading industrial nations in Canada, Mr Bush said the response from Europe "has been positive".

"Most European leaders understand something has to change in order for there to be peace, and that starts with free elections, a new [Palestinian] constitution, transparency, rule of law amongst the Palestinians."

Earlier, when asked whether his war against states which support terrorism would extend to Mr Arafat, the US leader said "I'm never ruling out military. All options are available, adding that in this case "the tool I'm using is diplomatic pressure".

Other G8 members have expressed varying degrees of opposition to interfering in the issue of the Palestinian leadership.

Complex pounded

In Hebron, Israeli soldiers using loud speakers warned Palestinians inside the hill-top compound to surrender within 10 minutes or face attacks, French news agency AFP reported.

Minutes later, two helicopters swooped over the building, unleashing a barrage of rockets and missiles.

The army has warned that it will overrun the battered complex if those inside do not come out.

Journalists have been denied access to Hebron, which has been called a "closed military zone" by the Israelis.

But Khalid al-Ammayreh, a Palestinian journalist inside Hebron, told BBC News Online that the building had been extremely badly damaged.

"The Israelis have been bombarding the building for the past 24 hours and they are wreaking havoc.

"Last night Apaches blasted it with rockets and the Israelis prevented ambulances going to help."

Israeli General David Blumenfeld said the army had arrested 40 suspected Palestinian militants in Hebron since Tuesday, adding that the compound had "become a sort of hotel for wanted Palestinians".

Hebron mayor, Mustafa Natshe, said contacts were under way with Israeli officials to end the stand-off but had so far produced no results.

'Spy' charged

In a separate development, Israeli prosecutors on Thursday charged a Lebanese-born Israeli man with spying for Hezbollah.

Israeli media said the suspect was the 35-year-old son of a Jewish mother and Shia Muslim father.

Israel's internal security agency, Shin Bet, said Hezbollah had asked the accused man to supply it with potential targets to attack in Tel Aviv, including gas and electricity stations.