Israel launched air strikes on Palestinian leader Mr Yasser Arafat's helicopter compound in the Gaza Strip and on the West Bank city of Jenin today in retaliation for a devastating wave of suicide bombings.
The upsurge of violence threatened to wreck a US peace drive intended to help bolster Arab support for the campaign in Afghanistan, and raised fears that 14 months of Middle East conflict could spiral out of control.
In a television address this evening, Prime Minister Mr Ariel Sharon blamed Mr Arafat for what he said was a war of terrorism and called him the biggest obstacle to peace.
"It is the aim of the terrorists...to exile us from here," he said. "This will not happen. We know who is responsible - Arafat is responsible for everything that is going on."
Palestinian cabinet minister Saeb Erekat claimed this amounted to a declaration of war. He denied Mr Arafat was to blame for the conflict and pointed the finger at Israel's occupation of Palestinian territory.
An Israeli political source said the rapid succession of attacks was just the beginning of Israel's response to the weekend bombings that killed 25 people in Jerusalem and Haifa in one of the bloodiest coordinated onslaughts in years.
Hamas took responsibility for the bombings, which opened a bloody new phase in a conflict in which at least 742 Palestinians and 222 Israelis have been killed.
A helicopter missile strike wrecked three of Mr Arafat's helicopters and damaged a hangar in densely populated Gaza City. At least 17 people were injured, hospital officials said. Mr Arafat was in the West Bank city of Ramallah at the time.
Three of Mr Arafat's helicopters were left in flames at the compound, about 70 metres from his home and 200 metres) from his main offices.
An hour later, two Israeli warplanes fired missiles at one of Arafat's West Bank offices and a Palestinian police headquarters in Jenin, witnesses and army officials said. There were no immediate reports of casualties.
Mr Erekat said the missile strike showed Israel was trying to destroy the Palestinian Authority and he called on the United States to force a halt to the bombardment.
The US refused to condemn the attack, claiming it was justified as Israel had a right to defend itself.
"Obviously Israel has the right to defend itself and the president understands that clearly," White House spokesman Mr Ari Fleischer said. He said the burden was now on Mr Arafat to show that he will act to stop the suicide attacks.
Britain said Israel was "entitled to its security" but called for a return to the peace process.