Palestinians reject Bethlehem deal

Israeli surveillance monitors the church

By Caroline Hawley BBC correspondent in Bethlehem

The Palestinians have rejected a proposal by Israel that militants holed up inside the Church of the Nativity in Bethlehem hand themselves over for trial in Israel or go into exile abroad.

A member of a negotiating committee set up by Palestinian leader Yasser Arafat said both ideas were unacceptable.

It's unacceptable. They will not accept exile. This is their country

Salah al-Taamari
Palestinian negotiator

Nearly two weeks on and the stand-off at the Church of the Nativity is still going on.

Israeli troops are surrounding the site - the Israeli army says there are at least 30 militants from Hamas, Islamic Jihad and Yasser Arafat's Fatah movement inside.

For the past few days Israeli has had surveillance balloons photographing the church.

"We are seeing tens of terrorists with weapons, walking sometimes, running into the church. They have taken all the compound, " an Israeli army spokesman just outside Manger Square told the BBC.

"All the compound is totally under their full control of the different groups," he said.

The spokesman said the militants had also booby-trapped the inside of the church's doors, presumably to stop it being stormed.

No to exile

As the siege continues and with the US secretary of state trying to resolve the wider crisis, the CIA is reported to have been discussing possible options with the Israeli secret service.

But the Palestinians have rejected an Israeli suggestion that the militants go into exile in a third country.

One of the negotiators, Salah al-Taamari, said Palestinians had no intention of sending people into exile again.

He said Israeli Prime Minister Ariel Sharon was in no moral position to talk of people with blood on their hands.

The Palestinians say they are still prepared to begin direct negotiations with the Israelis immediately.

They insist Israel must allow them to have church representatives on their negotiating team before they will talk.