Palestinians have hailed a world court ruling that Israel's West Bank barrier is illegal and should be torn down.
Israelis say the barrier keeps militants away
Palestinian leader Yasser Arafat described it as a "victory for the Palestinian people".
But Israel said it would not accept the "unjust" - and non-binding decision of the International Court of Justice.
The court said the construction of the Israeli "wall" was "tantamount to annexation" and impeded the Palestinian right to self-determination.
Israel insists the barrier is needed to keep out West Bank militants. Palestinians consider it a land grab.
Several countries, including the US and UK, had argued the court should stay out of the issue, warning that any opinion it gave could interfere with the Middle East peace process.
"We do not believe that that's the appropriate forum to resolve what is a political issue," said White House spokesman Scott McClellan.
The court's decision can serve as a basis for United Nations action.
"We salute this decision condemning the racist wall," Mr Arafat told reporters at his West Bank headquarters.
His Prime Minister Ahmed Qurei said it was "a historic day".
"They [judges] said it has to be torn down and we say that we must tear it down," Mr Qurei said
Israeli spokesmen were quick to dismiss the ICJ ruling.
"I believe that after all the rancour dies, this resolution
will find its place in the garbage can of history," said Raanan Gissin, a senior aide to Israeli Prime Minister Ariel Sharon.
"The court has made an unjust ruling denying Israel its right of self-defence."
Finance Minister Binyamin Netanyahu went even further, pouring scorn on possible action by the UN General Assembly - which took the issue to court.
"They [the GA] can decide anything there. They can say that the earth is flat. It won't make it legal, it won't make it true and it won't make it just."
No action expected
After spending five months considering the issue, the court in The Hague unanimously rejected Israel's argument that it had no right to rule on the legality of the barrier.
It ruled that:
Reading the judgment, ICJ President Shi Jiuyong of China said the court was not convinced the barrier's construction was the only means to achieve Israel's aim of protecting its people from suicide attacks.
- the construction and its associated regime was contrary to international law;
- Israel was under obligation to cease construction and dismantle the wall;
- Israel should compensate owners of land seized to construct the barrier and those harmed by the barrier;
- all states are under obligation not to recognise the situation and ensure Israel's compliance with international law;
- the UN should consider what further action to take.
The construction of the wall would be "tantamount to de facto annexation," Mr Shi said.
One of the 15 members of the court, US Judge Thomas Buergenthal, dissented from all the findings.
BBC diplomatic correspondent Jonathan Marcus says the real question is what, if anything, will change now that the barrier has been declared illegal.
Arab governments are likely to seek an emergency session of the UN General Assembly to try to secure a resolution endorsing the court's decision.
But experts caution against any expectation of tough UN action - not least because of the US veto in the Security Council.