Israel intensifies West Bank campaign

Israel has reoccupied four West Bank cities in search of militants

Heavy gun battles have been raging throughout the day between Israeli forces and Palestinian gunmen in the West Bank towns of Bethlehem and Ramallah.

Dozens of Palestinians are reported to be sheltering in churches in the centre of Bethlehem as Palestinian gunmen exchanged fire with Israeli tanks nearby.

The Israeli army has reoccupied Bethlehem and Ramallah, as well as the towns of Qalqilya and Tulkarm, in an operation it says is aimed at arresting Palestinian militants, following a series of deadly suicide bombings in Israel.

Tanks are also reported to have entered the town of Jenin, and to be massing around Nablus, although it is not clear whether these movements are preludes to full-scale invasions.

Reports said three Palestinian gunman and at least four non-combatants were killed by Israeli fire in Bethlehem, but there is confusion about another incident in which medical sources said Israeli troops opened fire on a Roman Catholic church, allegedly killing a priest.

The Vatican denied that the priest originally named was dead, and the Israelis banned any independent verification, according to AFP - which carried the original report.

In other developments:

• Washington has allowed diplomats' families to leave Israel at US Government's expense
• The European Union calls for Israeli withdrawal from Palestinian cities
• Israel warns Hezbollah fighters are massing on Lebanese-Israeli border

Ramallah surrender

Earlier, tanks and helicopter gunships blitzed the Ramallah headquarters of Palestinian preventative security chief Jibril Rajoub, setting buildings ablaze and causing an unknown number of casualties among the 400 people said to be inside.

Rajoub said there were no militants in his compound

The people holed up inside the security compound then surrendered in a US-brokered ceasefire.

Israel accused Mr Rajoub of sheltering dozens of fighters in his headquarters, but the security chief said the people inside the building were officials, women employees and three children.

Israel media reported that the army's main target in the compound was the commander of Fatah in the West Bank, Marwan Barghouti, who Israel accuses of involvement in recent militant attacks.

Arafat extradition considered

Israeli Prime Minister Ariel Sharon says his army's actions are aimed at eliminating once and for all what he calls a terrorist infrastructure.

Mr Sharon has said he does not rule out the possibility of exiling Palestinian leader Yasser Arafat, who is besieged in his Ramallah headquarters.

It's going to be one-way ticket - he'll not be able to return

Israeli Prime Minister Ariel Sharon

EU officials in Brussels responded to Mr Sharon's statement by saying Mr Arafat remained their interlocutor "in any negotiation" about the Middle East conflict.

Spain's foreign minister Josep Pique summoned Israel's ambassador in Madrid to urge compliance with a UN security council resolution calling for Israel's withdrawal from the occupied territories.

The EU position won strong backing from Russian Foreign Minister Igor Ivanov who is visiting Spain, which holds the EU presidency.

"We all share the objective of fighting international terrorism... but that cannot lead to the destruction of an independent Palestinian authority," he said.

Life under curfew

Officials at Ramallah's central hospital say they have started burying corpses of people killed during Israel's invasion in the hospital grounds because the morgue was full and travel to the cemetery was blocked.

The Israelis have met gunfire from Palestinian fighters

"We have found 28 bodies of people killed by Israelis so far. We are burying them in the garden because the ambulances cannot take them out," hospital administrator Mussa Abu Hmed told AFP.

The Palestinian Red Crescent complains of being unable to answer hundreds of calls it has received from the sick in Ramallah, while a convoy carrying its regional chief was detained and abused by the army.

"The behaviour toward the medical teams and to the sick and injured has been appalling," Red Crescent official Husam Sharkawi told the BBC.

But the Israeli army says many residents of Ramallah have taken advantage of a lifting of the curfew for several hours so they could buy food and other provisions. The curfew was reimposed at 1600 GMT