An Israeli statement said the decision to halt the withdrawals agreed in the latest interim peace deal was taken partly because of an attack on an Israeli soldier near Ramallah.

Earlier, the Israeli Prime Minister Binyamin Netanyahu wrote to US President Bill Clinton, accusing the Palestinians of breaching the peace deal.

Mr Netanyahu's chief media advisor, David Bar-Ilan, said the letter referred to four major areas of violation.

"It asks for American pressure and influence on the PLO to cease and desist from these violations," Mr Bar-Ilan said.

Palestinian leader Yasser Arafat dismissed the Israeli accusations, saying they were nothing new.

Mr Netanyahu accuses the Palestinian leadership of incitement and of openly planning to declare an independent state next year, although the final phase of negotiations has not yet begun.

Mr Netanyahu said other Palestinian violations included statements by the speaker of the Palestinian legislature, Ahmed Qorei, calling on Palestinians to fight the further expansion of Jewish settlement on the West Bank.

The prime minister's complaints come only days after he told the BBC that the Palestinians had largely complied with the terms of the interim agreement.

"So far, in last two weeks, we saw that they did more or less what they promised to do," Mr Netanyahu told BBC One's Breakfast with Frost programme.

Violence after funeral

A protest in support of Palestinian prisoners turned violent

The Israeli move comes against a background of increasing Israeli-Palestinian violence.

Palestinians clashed with Israeli police in East Jerusalem, following the funeral of a murdered Palestinian.

The 41-year-old father of six was stabbed to death in a killing which is being blamed on a Jewish extremist.

Hundreds of Palestinians are reported to have been involved in the clashes.

Mr Arafat described the murder of the Arab as a breach of the peace deal with Israel and part of a continuing attempt to drive Arabs out of Jerusalem.

The man was killed in the city's ethnically mixed Abu Tor region, where Jews and Arabs are in daily contact.

In the incident which prompted Israel's announcement about suspending withdrawals, a car carrying an Israeli soldier and a civilian was intercepted by Palestinian youths near the town of Ramallah, after a protest against the continued detention of Palestinians in Israeli jails.