Israeli rift over blockade

Sandbags and trenches have been used to seal off Ramallah

A deep political rift has developed in Israel over the tightening of its blockade of Palestinian territories, after troops sealed off the main West Bank town of Ramallah and blocked access to other areas.

Several Labour ministers in the new right-wing dominated government of Prime Minister Ariel Sharon strongly criticised the measures and called for a review.

Shimon Peres (left) says blockade "must be revised"

Transport Minister Ephraim Sneh warned that the policy would backfire, saying it damaged Israel's reputation internationally and would actually involve more Palestinians in the cycle of violence.

"It makes things hard for the general population and makes them feel they have nothing to lose," Mr Sneh, a Labour coalition member, said. "It does not turn the rage towards the perpetrators, but towards us."

It is aimed at preventing movement of terrorist cells, but it provokes bitterness among Palestinians and international reproaches

Cabinet minister Ephraim Sneh

His warning came as clashes erupted between Israeli troops and Palestinians trying to reopen a road outside Ramallah where Israeli-dug trenches have cut off the university campus and thousands villagers at Birzeit.

"This is Sharon's war against the Palestinian people... it is a racist war," said Palestinian Information Minister Yasser Abed Rabbo who was among the 1,000 protesters.

At least five Palestinians were injured by Israeli gunfire and dozens were overcome by teargas as bulldozers were brought in to fill in the trenches. Some of protesters threw stones at the troops.

'Anti-terror' policy

The BBC Jerusalem correspondent Hilary Andersson says that, with the economic blockade of the Palestinian areas already in its fifth month, the mood amongst many ordinary people is explosive.

Israel has rejected accusations that its stranglehold on the Palestinian areas is a collective punishment, saying it is a security measure to prevent further armed attacks on Israelis.

"If the Palestinian Authority is so concerned about the well-being of its people, it would have stopped these terrorist activities, most of which are controlled by the Palestinian Authority itself," said Mr Sharon's spokesman, Raanan Gissin.

Economic collapse

There have been fresh warnings that the blockade has caused an unprecedented crisis in the Palestinian economy, which is kept going only by international donations.

Palestinian Finance Minister Muhammad al-Nashashibi says the economy has shrunk by 25% since September and accused Israel of withholding $600m in taxes.

Israeli denies this is collective punishment

Arab foreign ministers have agreed to do more to relieve the situation, following Palestinian criticism that only $8m of a promised $1bn in aid had reached those in need.

At a meeting in Cairo, the ministers also renewed calls for an international security force to protect Palestinians from the Israeli forces occupying Gaza and the West Bank.

As well as cutting off the last remaining routes in and out of Ramallah, the Israelis have dug more trenches and put up sandhills surrounding the towns of Jericho and Jenin.

Unemployment has risen dramatically and hundreds of thousands of people have fallen below the poverty line because they cannot travel to their places of work.

A senior European Union delegation is in Gaza for a meeting on Monday with the Palestinian leader, Yasser Arafat, and to finalise plans for a donors' conference.

But they are also expected to raise concerns about reports of wastage and corruption in the Palestinian authority, and ask questions about how exactly donors money is being spent.