Israel was massing tanks and infantry on the outskirts of Palestinian cities in the West Bank early today, in an apparent prelude to a possible major ground forces incursion into Palestinian controlled territory.
The unprecedented troop build-up came amid a dramatic escalation of the 10-month Israeli-Palestinian conflict, which yesterday saw an Israeli helicopter attack in Bethlehem that killed four alleged Hamas militants and Palestinian mortar fire at the Gilo neighbourhood on Jerusalem's southern edge.
There were scuffles between Israeli police and Palestinians prior to a memorial gathering for the PLO's top Jerusalem official Mr Faisal Husseini, who died last month, and the funerals of two Israeli soldiers killed by a Palestinian suicide bomber on Monday.
Israel's Prime Minister, Mr Ariel Sharon, told President Bush in an early evening phone call that he remained committed to US proposals for halting the violence and resuming peace negotiations, but in a public address he declared that Israel was no longer maintaining his previously declared policy of "restraint". And, tellingly, his Defence Minister, Mr Benjamin Ben-Eliezer, cancelled a 10-day trip to the US, staying home to oversee the troop build-up.
Some aides to Mr Sharon late last night played down the significance of the soldiers' movements, suggesting that the intention was to galvanise increased international pressure on the Palestinian Authority President, Mr Yasser Arafat, to rein in Palestinian militants. But Israeli military analysts noted that the army has drawn up various plans for a full-scale confrontation with Mr Arafat's PA, including the re-invasion of large areas of PA-controlled land.
The Palestinian so-called "united Intifada leadership" yesterday issued a leaflet that formally declared the non-existent, American-brokered ceasefire over.
The Islamic Jihad group, which claimed responsibility for Monday's suicide bombing, promised that more would soon follow. Another bombing attack was foiled in Tel Aviv when an explosive device was spotted and defused.
For its part, Israel, which had initially responded to the suicide bombing by opening fire overnight on several Palestinian Authority positions in the West Bank, vowed that any further attacks would be met with an immediate military response.
The country's secret service chief, meanwhile, revealed that Jewish settler radicals had killed a Palestinian in one of several recent vigilante attacks.
The car belonging to a settler militant exploded earlier this week - apparently as an unexpected result of the detonation of the explosives he was transporting. The upsurge in violence and threats came, rather ironically, as the US State Department pleaded with both sides to quell the use of force and recognise that there was "no military solution" to their disputes.
The European Union, meanwhile, urged Israel to accept third-party monitors, to try and curb violence and boost what the British Foreign Secretary, Mr Jack Straw, optimistically termed "confidence building".
Aides to Mr Sharon responded by noting that in Beit Jala, where several European monitors have been deployed, their presence proved irrelevant last night, when the recent calm in that area was shattered by the fire on Gilo.
Yesterday's helicopter strike on Bethlehem was carried out despite American and other international pressure on Israel to end its policy of "targeted killings" - the assassinations of alleged violent militants.
Of the four men killed, two were known Hamas activists; one of them, Mr Omar Saadeh, was said by Israeli officials to have headed the Hamas military wing in the Bethlehem area. At least 10 other people were injured in the attack.
The officials said the men were planning to stage a bombing attack at next week's closing ceremony of the Maccabiah Games - the so-called "Jewish Olympics", attended by more than 3,000 Jewish athletes, which began on Monday.
Early on Monday morning, two Palestinians blew themselves up a few hundreds yards from the stadium where the Maccabiah opening ceremony was held, while apparently preparing a bomb.