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Sunday, 12 May, 2002, 17:00 GMT 18:00 UK
Israel sends Gaza reservists home
Israel has sent home army reservists called up after the cabinet authorised military action in retaliation for a Palestinian suicide bombing.
Israeli tanks were sent to the border with the Gaza Strip over the past few days but, on Sunday, the government indicated that the proposed operation had been shelved.
On another front, Israeli Prime Minister Ariel Sharon is facing a key policy battle within his own party over the question of a Palestinian state.
Members of the right-wing Likud party are threatening to propose a vote stating that the party would never accept Palestinian sovereignty at a meeting of the party's central committee on Sunday evening.
Analysts say that if the vote is passed, it could tie Mr Sharon's hands in future peace efforts and weaken his position within the party.
In the Gaza Strip, a Palestinian was reported to have shot dead his Israeli employer at a Jewish settlement in the southern Gaza Strip.
The man was arrested, an army spokesman said.
Residents in Gaza, home to one million Palestinians, have been bracing for an Israeli incursion since the suicide bombing in a suburban Tel Aviv pool hall killed 15 Israelis.
The Palestinian bomber - who was also killed - was initially thought to have come from the Gaza strip.
The Israeli Government said it had reviewed its response because details of the military plans had been extensively leaked and Palestinian militants had been given too much time to prepare.
But military affairs correspondents in Israel's main newspapers said the leaks were used as an excuse for Israel to refrain from an operation that did not have a consensus either among the people or among security establishment officials.
They reported that some generals had opposed a Gaza operation, warning of heavy Israeli army and Palestinian casualties in the densely populated strip.
Israel had been urged by the US and other foreign leaders not to pursue another military operation in Palestinian territories.
Reports say the fear was that this could bury moves for fresh diplomacy, including a US initiative for a peace conference in the summer.
In Bethlehem, Christians resumed special services at the Church of the Nativity for the first time since the siege of the Palestinian gunmen by Israeli troops there ended two days ago.
The deal allowed 13 Palestinian militants on Israel's most-wanted list to be exiled from the Palestinian territories.
European Union foreign ministers are expected to decide the fate of the men who are currently in Cyprus.
The Cypriot Government says it wants the men to leave by Wednesday.
The men are expected to spend their exile in a European country either separately or together.