Palestinians declare arms issue closed

The Karine-A was carrying 50 tonnes of weapons

The Palestinian Authority has welcomed Washington's praise for a letter from its leader Yasser Arafat accepting responsibility for an attempt to smuggle arms from Iran in January.

But Israel has accused the Palestinians of tricking the Americans with the letter, which avoids linking Mr Arafat directly with the shipment of arms, which was intercepted by Israel in international waters.

Arafat previously denied any link to the ship

The United States had demanded an explanation from Mr Arafat, saying it had compelling evidence of Palestinian involvement in the smuggling attempt.

The developments came as European Union states stepped up their efforts to calm tensions in the region and Israel wound up a massive show of force in Palestinian-administered towns in the Gaza Strip.

Mr Arafat's comments came in a letter to US Secretary of State Colin Powell.

"He [Arafat] wrote me a letter three days ago on the Karine-A, accepting responsibility - not personal responsibility, but as chairman of the Palestinian Authority," Mr Powell told a Congressional committee.

Mr Powell said the Palestinian leader had also promised not to buy arms in the future.

The State Department said it was satisfied with Mr Arafat's explanation but wanted action to follow his words.

Sharon urged Bush to cut ties with the Palestinian leader

Palestinian Cabinet Secretary Ahmad Abdul Rahman said Mr Powell's comments showed Palestinian-American relations had been restored and the arms ship issue was now closed.

An unnamed aide of Israeli Prime Minister Ariel Sharon, however, said Mr Arafat was "throwing dust in the eyes", according to a report by the French news agency AFP.

"Yasser Arafat is directly responsible from A to Z for this whole affair since he is the chairman of the Palestinian Authority to whom these arms were destined," the official said.

'Failed' incursion

Israeli forces have now withdrawn from all the Palestinian-ruled areas of Gaza they entered on Wednesday - an operation to show Palestinian it would not tolerate further militants attacks using an updated version of a home-made rocket system.

Israel said the arms would have changed the strategic balance

But military commentators in Israel have derided the operation. Some have suggested that the threat posed by the Qassam-2 missile has been exaggerated.

"Even if Hamas has stockpiled dozens of the missiles, the simultaneous launching of several could cause a small number of casualties, if indeed they caused any damage at all," the Haaretz newspaper quoted unnamed experts as saying.

In an interview on Israeli radio, Reserve General Danny Rothschild said the deployment into three towns of hundreds of crack troops, dozens of tanks, bulldozers and dog-units was "out of all proportion to the goals and, what's more, those goals were not even achieved".

No Qassam parts were seized during the operation and 16 of the 18 people arrested - most of them relatives of fugitive Hamas members - have been released.

Euro peace mission

German Foreign Minister Joschka Fischer and UK Foreign Secretary Jack Straw held talks with Israeli and Palestinian officials on Thursday in an intensified European drive to end 16 months of bloodshed.

They conducted separate peace missions to the region after a high-level European Union conference diverged from Washington's position that Palestinian militant attacks must stop before a resumption of peace talks.

Mr Straw - whose visit ended on Thursday - indicated that London was following Washington's line, telling reporters that peace was possible only if Israel was given security.

Correspondents said Mr Fischer was unlikely to reflect the US view so closely.

"The door is closed and the key seems to be lost and we need a new key," Mr Fischer said after arriving in Israel and being briefed by the departing Mr Straw.