Arafat offers truce

The offer came a day after the Palestinian premier-designate, Ahmed Qureia, handed Arafat the authority to appoint a new Cabinet, setting up a new confrontation with Israel, which has said it will not deal with an Arafat-dominated government.

In New York, the UN Security Council debated a Palestinian resolution to halt an Israeli decision to "remove" Arafat and was expected to vote on it Tuesday.

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Arafat's national security adviser, Brig. Gen. Jibril Rajoub, said the new ceasefire offer was meant to end all Palestinian acts of violence in exchange for an Israeli commitment to stop its military operations, including an end to blockades on Palestinian towns and villages.

"We are ready to sit and we are ready to declare a general ceasefire, but there needs to be something mutual because without mutuality nothing will be achieved," Rajoub told Israel Radio.

Rajoub did not say how the Palestinian Authority would reach a new truce with Hamas and Islamic Jihad - the two militant groups responsible for most attacks on Israelis in the past three years. He also did not address the US and Israeli demand that the authority crack down on the groups.

Palestinian militant groups abandoned a truce last month after Israel killed a Hamas political leader in response to an Aug. 19 Hamas bus bombing that killed 22 people.

An Israeli government official, speaking on condition of anonymity, said the security Cabinet had decided last Thursday to reject all such offers.

"The government of Israel rejects any idea of a ceasefire as a way of dealing with terrorism. Terrorism will stop only with the dismantlement and eradication of the terrorist organisations. This is the duty and the responsibility of the Palestinian Authority," the Cabinet statement says.

Israel's security Cabinet decided at the same meeting to "remove" Arafat, which appears to leave open three options: expelling, killing or further isolating the veteran Palestinian leader. The decision came after twin suicide bombings in which 15 people were killed.

Israel Radio quoted unnamed government officials as saying the truce offer was an attempt to bring Arafat back to centre-stage and "rescue" him from the threat of expulsion.

"There is no need to give a chance to a ceasefire that does not include dismantling all the armed groups, all the terrorist groups," said Israeli lawmaker Yuval Steinitz, who is in Washington meeting with Bush administration officials, including National Security Adviser Condoleezza Rice.

As both sides braced for more violence, diplomats said it would be difficult to form a new Palestinian government.

Sixteen of the 24 ministers in Qureia's new Cabinet will be appointed by Fatah councils controlled by Arafat, officials said Monday.

One official, Hani al-Hassan, who is close to Arafat, said it was undecided whether Fatah would appoint the ministers directly or offer Qureia a list of candidates for his choice. The other eight ministers would represent different movements or independents.