Israeli missiles have hit a Palestinian naval police dock where Mr Yasser Arafat's private boat was anchored on the coast of the Gaza Strip, witnesses and Palestinian security sources say.
Mr Arafat's boat was not hit in the attack early today, which dealt a fresh blow to US peace efforts and was partly carried out in retaliation for an attempt to smuggle a shipload of arms which Israeli commandos seized in the Red Sea last week.
The Palestinian president was in the West Bank city of Ramallah at the time. He has been stranded there since early December after Israeli forces destroyed his helicopters in Gaza.
The attack launched from Israeli warships followed a Palestinian Authority announcement it had arrested three of its own security officers accused by Israel of involvement in the arms shipment. Two are naval police officers.
Israel had accused Mr Arafat and the Palestinian Authority of being behind the shipment, which it said was bound for Palestinian-ruled areas in violation of interim peace accords. The Palestinians denied the allegations.
The Israeli army said it hit the naval police post and a boat which two of the crew members found aboard the arms ship had once used. It said it was also responding to a Palestinian attack on Wednesday in which four Israeli soldiers were killed.
US Secretary of State Mr Colin Powell had backed Israel's demand that Arafat arrest those responsible for the arms ship.
Israel, which in the past has criticised Arafat for a "revolving door" arrest policy, said it would welcome the detentions if they were genuine.
A US official called the arrests a "step in a positive direction" but said Mr Arafat must now provide a full explanation of the incident.