'Israel still determined to banish Arafat'

"We will banish him at the opportune moment and in the method that suits us," the hawkish minister said on Israeli army radio.

Arafat has been effectively confined to his West Bank headquarters by the Israeli army since December 2001, having been declared an obstacle to peace by his arch enemy, Israeli Prime Minister Ariel Sharon.

The Israeli security cabinet, which includes Mofaz, agreed in principle last September to "remove" Arafat from his headquarters.

Sharon also sparked widespread international condemnation in April when he declared that Arafat was "a marked man."

But Mofaz said that Israel would not be taking any radical action against the veteran leader as the government was currently giving priority to Sharon's so-called disengagement plan which will see Israel pull out of the Gaza Strip next year.

Mofaz also hinted that Israel would simply attempt to sideline Arafat by saying that the government would encourage "pragmatic elements within the Palestinian Authority who are in favour of dialogue with Israel".

Meanwhile, Israel began construction work on the southern section of its controversial West Bank separation barrier Sunday, days after a double suicide bombing by Palestinians from the region.

At least two bulldozers could be seen levelling land around the village of Beit Awwa near the internationally-recognised border between Israel and the West Bank, witnesses said.

"Work has begun in the area as planned," a defence ministry spokeswoman confirmed to AFP.

Sixteen people as well as the two bombers from the hardline Hamas movement were killed Tuesday in a twin attack on board buses in the southern Israeli city of Beersheva. The militants entered Israel from the main southern West Bank city of Hebron.

Construction work on the barrier had been previously restricted to the north of the Palestinian territory, a strategy which Israeli officials say has contributed to a concentration of militant activity in the south.

Officials said in the aftermath of the suicide attacks that construction would be accelerated in the south, although they insisted the start of work on the section had been decided on some time ago and was not in response to the bus bombings.

The Israeli media had been fiercely critical of the lack of progress in work on the southern section.

While Israel insists that the barrier -- a montage of concrete, electronic fencing and razor wire -- is essential to prevent attacks, the Palestinians say its route shows it has less to do with security than grab their land.