Israel said today it would let Yasser Arafat go to an Arab summit in Beirut only if he implemented a US truce plan, and might bar his return if it judged his behaviour there as incitement .
US Vice President Mr Dick Cheney offered to hold talks with the Palestinian President on condition that he embraced the ceasefire plan.
Palestinian officials hailed Mr Cheney's new willingness to meet Mr Arafat but blasted the conditions on Mr Arafat's travels.
Israeli Prime Minister Ariel Sharon said he would allow Mr Arafat to attend next week's Arab League gathering, where a Saudi plan for Middle East peace is to be discussed, if the Palestinian leader had carried out a US truce proposal.
Standing alongside Mr Cheney, he told a news conference that his government would then have to decide whether to let Mr Arafat return if his actions at the summit amounted to incitement .
Mr Arafat's senior adviser, Mr Nabil Abu Rdainah, said Mr Cheney's comments were a move in the right direction , putting US-Palestinian relations on the right track.
But Mr Rdainah said Mr Sharon's remarks were incitement and do not help further American peace efforts.
Mr Sharon has made four visits to see US President Bush at the White House since the Israeli premier was elected in February 2001. But Mr Bush has not invited Mr Arafat or dispatched top officials to meet him.
Mr Cheney suggested that situation could change if Mr Arafat helped to bring an end to the worst Israeli-Palestinian violence in decades.
US Middle East envoy General Anthony Zinni has met both sides since his arrival on Thursday in another bid to win a ceasefire.
The Israeli army has kept Mr Arafat confined to his West Bank headquarters at Ramallah, north of Jerusalem, since early December as the Palestinian uprising against occupation, now nearly 18 months old, raged on.
Asked what would happen if major suicide bombings resumed while Mr Arafat was abroad, Mr Sharon said he hoped there would not be terrible terror attacks here and the Palestinian president would not deliver a speech of incitement .
"I think he understands or is starting to understand the importance of making peace here. If it is clear to us he did not act in this way, the government will meet and will have to take a decision. I don't rule out any possibilities," Mr Sharon said.
But Mr Sharon was likely to face an international outcry at any attempt to exile Mr Arafat as well as strong opposition to such a move from his key partner in Israel's coalition government, the centre-left Labour party.
Washington's increased inclination to deal with Mr Arafat to boost Arab support for its war on terror could put Mr Sharon on a collision course with the United States should Israel not let him back into the West Bank and or Gaza.