Sharon unmoved by US pressure

Bethlehem's Nativity Church is to stay surrounded

Israeli Prime Minister Ariel Sharon has said the military campaign in the West Bank will continue until "terrorist organisations" are crushed, despite calls by the US to pull out immediately.

The army will continue operating until the mission has been completed, until it has dismantled Arafat's terror infrastructure and the murderers have been arrested

Ariel Sharon

He told a stormy special session of parliament that Israel had no choice but to act with all its might - and he again accused Palestinian leader Yasser Arafat of betraying promises to abandon terrorism.

The Palestinian leadership responded by saying it would resist Mr Sharon's "criminal war" and accused him of seeking "to break" the Palestinian Authority.

Israeli forces continued bombarding refugee camps in Nablus and Jenin on Monday.

	Click here for map of Israeli operation

The Israeli army said almost 100 Palestinian gunmen surrendered in Nablus, but this could not be independently confirmed.

Palestinian sources in the refugee camps described bodies lying in the streets and people bleeding to death because ambulances could not reach them.

Two Israeli soldiers were killed in the Jenin clashes.

Israel sent troops and tanks into Palestinian cities on 29 March after a suicide bombing that killed 27 people at the start of the Jewish Passover holiday.

Withdrawal calls

Chief Palestinian negotiator Saeb Erekat said Mr Sharon's comments to the Knesset undermined a visit to the region by US Secretary of State Colin Powell, who has called on Israel to withdraw at once.

Sharon said he had evidence linking Arafat to suicide bombings

"He is telling Powell: 'Don't come because we have finished everything, we are setting up buffer zones, we will continue the occupation and we will not end our operations'," he said.

Mr Powell, who has arrived in Morocco at the start of a Middle East tour, has said he expects an Israeli withdrawal from the West Bank "without delay".

European Commission President Romano Prodi also repeated his call for Israeli forces to withdraw and urged the Israeli authorities to guarantee safe access for aid workers to the Palestinian population.

Vatican apprehension

The situation around Bethlehem's Church of the Nativity - sacred to Christians as the birthplace of Jesus Christ - remains tense, with more reports of heavy gunfire.

The Holy See considers the respect of the status quo of holy places to be an absolute priority

Vatican spokesman Joaquin Navarro-Valls

Mr Sharon said Israeli troops would remain in place around the church and called on some 200 Palestinians seeking refuge inside to give themselves up. Both sides have denied blame for the shooting.

The Vatican said it was following the situation with great concern.

"The Holy See is following with extreme apprehension the situation in Bethlehem, and is trying to ascertain the truth of the most recent developments," said Vatican spokesman Joaquin Navarro-Valls.

He said the Vatican had reiterated to Israel "that the Holy See considers the respect of the status quo of holy places to be an absolute priority."

'Brilliant successes'

Mr Sharon said he would try to finish the operation as soon as possible but the military action would continue for the time being.

Thousands marched in Gaza City in solidarity with Yasser Arafat

"The army will continue operating until the mission has been completed, until it has dismantled Arafat's terror infrastructure and the murderers have been arrested," he said, amid heckling mainly from Israeli Arab members of the Knesset.

He showed the Knesset documents, which he said proved that Mr Arafat and Marwan Barghouti, the head of the Palestinian leader's Fatah faction, had arranged payments for terrorist activities.

He said that thousands of people had been arrested in the operations, which he described as "brilliant successes".

The army would set up defensive buffer zones once it had withdrawn from the territories, he added.

Mr Sharon also welcomed a Saudi peace initiative endorsed by Arab leaders last month.

He said the initiative would have to be negotiated in detail, adding that he was "ready to go anywhere" to discuss it.