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Friday, 3 May, 2002, 07:04 GMT 08:04 UK
US plans Mid-East peace conference
Yasser Arafat leaves his compound in Ramallah
Arafat made the most of his first day of freedom
US Secretary of State Colin Powell has announced that preparations are under way to hold a Middle East peace conference within the next couple of months.

US officials say the meeting - which will seek to outline a long-term political settlement - will be attended by foreign ministers and probably take place in Europe.

President Bush
Mr Bush wants more action from Mr Arafat
But Mr Powell said the Palestinian leader, Yasser Arafat, must understand that this was his last chance to seize such an opportunity.

Early on Friday, an Israeli military raid on the West Bank town of Nablus left two Palestinians dead, one of them a policeman.

Israel said it was taking action to "prevent terror attacks and destroy the terror infrastructure".

In New York, UN Secretary General Kofi Annan has announced that he is formally disbanding the mission to investigate the Israeli military incursion at the Jenin refugee camp.

A report by the watchdog Human Rights Watch said that there was no massacre at the end, as Palestinians have claimed, but that the Israeli army did commit war crimes.

'Balancing act'

US President George W Bush urged Mr Arafat to use his new-found freedom, since his release from a month-long siege on Thursday, to show leadership towards achieving peace with Israel.

However, the president has no plans to meet the Palestinian leader at present.

Speaking after a summit with European leaders in Washington Mr Bush pledged support for the Palestinian people by helping to build institutions that would serve them, "a Palestinian state and its neighbours as well".

But in a stern warning to Mr Arafat he said such a state "must be achieved by negotiating an end to occupation" and could not be "based on a foundation of terror or corruption".
Rubble at the Jenin refugee camp
Palestinians accuse Israel of a massacre at Jenin

The American leader, however, also urged Israel not to prevent Mr Arafat from returning to the Palestinian territories should he decide to travel abroad.

Speaking earlier, presidential spokesman Ari Fleischer made it clear there would, for the time being, be no welcome at the White House for the Palestinian leader.

"Yasser Arafat has not yet earned his trust," he said.

On Thursday, both houses of the US Congress passed motions backing Israel and its military campaign aimed at "dismantling the terrorist infrastructure" in the West Bank and Gaza.

"Let every terrorist know, the American people will never abandon freedom, democracy or Israel," said Texas Representative Tom DeLay.

Issue of trust

On Thursday, Mr Arafat left his Ramallah compound for the first time in a month to a rapturous reception from his supporters.

Mr Arafat's first stop on leaving his compound was the local hospital where he said prayers at the graves of a number of people who died during Israeli incursions.

Scores of children across the road called to him: "We will sacrifice our lives for you".

Priests taking out the body of a Palestinian killed on Thursday
The number of casualties at Bethlehem rises
But the BBC's Paul Adams says that, while Mr Arafat's popularity among his own people may have soared, none of this means that Israeli Prime Minister Ariel Sharon is planning to sit down and talk peace with him.

Mr Sharon's office said on Thursday that a captured leader of the Palestinian uprising, Marwan Barghouti, had told Israeli interrogators that Mr Arafat personally approved weapons funding for attacks against Israelis.

However Palestinian officials have consistently denied that Mr Arafat approved such attacks against Israel.

Food aid

One of Mr Arafat's first comments after being released was to appeal to the world to help end the confrontation at Bethlehem.

More than 200 people have been trapped inside the church - which Christians say marks the birthplace of Jesus - for four weeks.

They include about 30 armed Palestinians wanted by Israel.

One Palestinian was killed and at least two others wounded in an exchange of fire outside the church on Thursday.

Despite the continuing stand-off in Bethlehem, a group of peace activists managed to get into the Church of the Nativity, taking food and cigarettes to those still trapped inside.

The BBC's Jon Leyne reports from Washington
"The United States and Europe talked about their shared interest in bringing peace the Middle East"
European Union's Foreign Policy Chief Javier Solana
"We have tried to establish a comprehensive approach"
See also:

02 May 02 | Middle East
In pictures: Arafat's release
02 May 02 | Middle East
Building barriers not bridges
02 May 02 | Middle East
Ramallah deal 'vague'
01 May 02 | Middle East
Huge turnout for Gaza victims
02 May 02 | Middle East
Blast targets British Council in Gaza
30 Apr 02 | Middle East
Profile: Israel's six wanted
02 May 02 | Middle East
UN abandons Jenin probe
29 Apr 02 | Middle East
Expert weighs up Jenin 'massacre'
30 Apr 02 | Middle East
Palestinians leave besieged church
03 May 02 | Middle East
'No Jenin massacre' says rights group
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