Arafat sets conditions for poll

Despite a deal, Israeli troops have only left Bethlehem

Palestinian leader Yasser Arafat has declared in a key speech to MPs that parliamentary and presidential elections can only be held when Israel withdraws from Palestinian towns and cities.

Presidential and parliamentary elections must take place but in a democratic atmosphere - Israel must lift its siege of Palestinian cities

Draft copy of Yasser Arafat's speech

In his first appearance before the Palestinian assembly in 18 months, the shaky 73-year-old reaffirmed that he wanted the elections to be held, as scheduled, in January 2003.

Parliament is due to discuss procedures for the elections in the course of Monday's session, but Mr Arafat said they could only occur when Israel fully implements a peace deal to withdraw from towns in the West Bank and Gaza Strip.

So far troops have only pulled out of the centre of Bethlehem.

"Presidential and parliamentary elections must take place - but in a democratic atmosphere. Israel must lift its siege of Palestinian cities, withdraw its tanks so that our people will be able to exert their democratic rights," he said.

Both Israel and its unequivocal ally, the United States, have made clear they want a change in the Palestinian leadership - although other countries insist that as long as Mr Arafat remains the elected leader they will continue to deal with him.

He intends to stand for re-election, and opinion polls show him the clear favourite to win.

Resignation joke

Against a background of fresh tension in the region, stoked by Israel's major incursion into the Gaza Strip, Mr Arafat said his people "stand firmly against all kinds of terrorism, whether it is by states, groups or individuals".

Arafat is expected to ask Palestinian MPs to endorse key changes

He said he condemned the attacks on Israeli citizens, but added that Israel had shamelessly exploited the terrorist attacks of 11 September to cast Palestinian resistance as terrorism.

And in an off-the-cuff remark interpreted as a joke, he said he was prepared to stand down, if the legislative body so desired.

"I wish you would, and give me a rest," he said with a smile.

Many MPs are participating in the session via video-link, after Israel refused to allow 12 of them to travel from the Gaza Strip to the West Bank.

The occasion is seen as a chance for Mr Arafat to prove his leadership. In addition to being rejected by the US, he is also under pressure at home to deliver reforms.

Dead and injured

The parliament started its session shortly after tanks, bulldozers and armoured cars moved into refugee camps in the centre of the Gaza Strip, destroying workshops where weapons were allegedly being manufactured and demolishing the home of a suspected militant.

Palestinian security forces said some 40 tanks moved into refugee camps of al-Bureij and Nusairat south of Gaza City, in the second major incursion in 48 hours.

Three members of a family who live at the al-Bureij refugee camp were injured in the raid, and the home of Mahmud Nashabak, a local member of the Popular Resistance Committee, was demolished.

Israeli tanks also entered the area near Deir el-Balah in central Gaza, where the army staged a large-scale raid two nights ago, destroying what Israel said were facilities for making terrorist weapons.

In a separate incident, Palestinian security sources said two Palestinians were killed near Gaza's southern border with Egypt.

The Israeli army has refused to comment on the report, but security sources have confirmed that the troops fired on two suspicious figures approaching a security fence.