Israel will sever ties with the Palestinian President, Mr Yasser Arafat, and launch widescale military operations in cities in the West Bank and Gaza Strip, a senior source in the Prime Minister, Mr Ariel Sharon's office said early today.
The source said the decision was reached in a security cabinet meeting in Tel Aviv after Palestinian gunmen killed 10 Israelis and injured 30 in an ambush of a bus near a Jewish settlement. Almost simultaneously, two Palestinian suicide bombers blew themselves up alongside Israeli cars in the Gaza Strip, injuring four people.
The source said the cabinet decided Arafat was "directly responsible for the series of terror attacks and has therefore decided...(that) Yasser Arafat is no longer relevant to the State of Israel and there will be no more contact with him".
The source added the security cabinet had approved military operations in cities across the West Bank and Gaza Strip "to carry out arrests and confiscate weapons".
As the Israeli ministers met in emergency session overnight, Israeli fighter planes began raids on Palestinian Authority installations in Gaza and Nablus, and ground forces tightened a military blockade around several West Bank cities. While some Palestinian officials asserted that a "deliberate escalation" by Israel had provoked the attacks, which were claimed by Hamas, Mr Arafat's office issued a statement of condemnation. It said the Palestinian Authority would now close down "all Hamas and Islamic Jihad institutions, including education, health and political offices." But aides to Mr Sharon dismissed the statement, insisting that Mr Arafat was actually encouraging the violence. Israeli officials claimed, indeed, that Mr Arafat had reached private understandings with Hamas leaders in recent days, under which while they would temporarily halt attacks on civilian targets inside Israel, they could continue attacking Israelis in the occupied territories.
"The time has come for us to take military action against Arafat," said the Israeli cabinet minister, Mr Danny Naveh. If Mr Arafat was ousted, countered the Palestinian negotiator, Mr Saeb Erekat, "What good will it do Israel?"
Three Palestinian attackers took part in last night's West Bank killings. They first detonated explosives that killed four passengers outright on the bus as it neared the settlement of Emmanuel, south-west of Nablus. They then fired on the bus, on other cars nearby and on the ambulances that raced to treat the wounded, killing six more people. Two of the gunmen escaped; the third was eventually shot dead. "We were hit, but we carried on evacuating the injured," said an ambulance driver, Mr Ya'akov Rosenblatt, who sustained minor injuries. "We got them to hospital and then they hospitalised me." For hours afterwards, the army searched in vain for the two gunmen. The bus stood skewed by the explosion, its sides peppered with bullet holes.
Dead bodies, covered in plastic sheeting, were lifted into ambulances. A baby's car seat lay abandoned at the roadside, the tarmac nearby stained with blood.
Israeli officials later claimed that leaders of the Hamas cell behind the attack were on a list of 33 "most dangerous" militants whom Israel and the US have been imploring Mr Arafat to arrest. Palestinian officials denied this.
Israel has already designated the Palestinian Authority an "entity that supports terrorism," and launched a series of attacks on PA installations after suicide bombings in Jerusalem and Haifa that killed 26 Israelis on December 1st and 2nd. If the government did not now "take apart" the Palestinian Authority, vowed a hardliner, Mr Avigdor Lieberman, the Infrastructure Minister, last night, he would work to "take apart" the government.
Significantly, officials in the Bush administration echoed Mr Sharon in blaming Mr Arafat for the ongoing attacks. In a ferocious public statement, the new American peace envoy here, Mr Anthony Zinni, demanded that Mr Arafat "destroy the infrastructure" of the "terrorist groups. Co-existence and peace," he added, "do not go hand in hand with terrorist organisations."
When he met Mr Sharon 10 days ago, President Bush is said to have tacitly approved any Israeli military action short of the direct targeting of Mr Arafat himself. As of last night, it was not even clear whether this presidential caution still applied.
Several of those in Mr Arafat's own inner circle are said to be urging him to give them approval for a genuine crackdown. "We have to disarm these organisations," said Mr Sari Nusseibeh, Mr Arafat's senior official in Jerusalem.
Underlining the sense that Mr Bush would shed few tears over Mr Arafat's demise, Israel's best-selling newspaper Yediot Ahronot quoted what it said were comments made by the President at a meeting on Tuesday with a group of leading Jewish donors to his Republican party. Mr Bush is reported to have remarked that Mr Arafat was a weak man, and that his regime was likely to collapse. Nevertheless, Mr Bush said, "If I was Ariel Sharon, I would act precisely as he is acting towards the Palestinians."
At the same meeting, the President is also said to have lambasted his own predecessor, Mr Bill Clinton, for being soft on terrorism, and previous State Department officials for an Arab bias.
"For years, those Arabists over there (at State) were playing their games. I'm putting an end to all that."
Lara Marlowe reports from Gaza City: Israel bombed the Gaza Strip for more than two and a half hours last night.
F-16 jets struck Gaza City 10 times between 9.45 p.m. and 12.25 a.m., repeatedly targeting the Palestinian maritime police headquarters in Mr Arafat's seaside presidential compound and a base belonging to Force-17, Mr Arafat's presidential guard.
The Israelis bombed the office of Fatah, Mr Arafat's political party, which had made a joint claim of responsibility with the Islamic extremist group Hamas for the attack near Nablus.