Israeli cabinet approves retaliation

Israel's cabinet today approved reprisals for this week's Palestinian suicide bombing while Palestinian police arrested 16 Hamas members.
The arrests were a sign that the Palestinian leader, Yasser Arafat, was taking some action against terror groups and came as expectations rose that Israeli forces would mount offensives in the Gaza Strip.

Meanwhile in Bethlehem, talks on resolving a five-week standoff at the Church of the Nativity hit a new impasse, after a partial deal had appeared imminent.

The deal foundered over a Palestinian demand to allow a European monitor into the shrine to safeguard 13 suspected militants who were to remain there until they are deported. So far, negotiators have failed to find a country to host them.

The Israeli prime minister, Ariel Sharon, convened his security cabinet at an air force base early today, immediately after his return from the United States, to approve a response to a Hamas suicide bombing on Tuesday in a pool hall in a Tel Aviv suburb.