Defense Minister Shaul Mofaz issued the warning as Arafat and his Prime Minister Mahmoud Abbas remained locked in a bitter power struggle. Abbas, backed by the United States and Israel, is increasingly unpopular at home and could be ousted, possibly in a parliament vote next week.
Nearly 200 Palestinian legislators, academics and writers appealed to both men in newspaper ads Tuesday to resolve their differences, saying the deadlock was hurting Palestinian interests. "We call on you to stop all actions that may open the door to foreign interference," the ad read.
Also Tuesday, leaders of the ruling Fatah movement met in the West Bank, but failed to find a compromise. Mediators were to continue shuttling between the two leaders who are no longer on speaking terms. Officials close to Abbas, meanwhile, denied reports that he has threatened to resign and leave the Palestinian areas.
An 11-year-old Palestinian girl died of injuries sustained last week in an Israeli missile strike in Gaza City. In all, 15 Palestinians, including 11 Hamas members and four bystanders, have been killed in six missile attacks on Hamas targets in the past two weeks, part of a tough new policy adopted after a Hamas suicide bombing in mid-August killed 21 people on a Jerusalem bus.
An Israeli inquiry commission has sharply condemned the role of the government and police in the killing of 13 Israeli Arabs during pro-Palestinian riots three years ago, reports CBS News Correspondent Robert Berger. However, Israeli Arabs say the report did not go far enough.
Israeli Arab parliament member Ahmed Tibi is disappointed the inquiry commission did not recommend legal action.
"Those who shot and killed those 13 citizens should be brought into court and put in jail," he said.
Many Jewish Israelis, on the other hand, were dismayed by the report, saying the police were put on trial instead of the Arab rioters.
The landmark report on Israel's treatment of its large Arab minority continued to dominate public debate a day after its release. The 831-page report concluded that successive Israeli governments discriminated against Arab citizens, and that the minority's growing frustration was a key trigger in the October 2000 riots in which 13 Arabs were killed by police fire.
The report, issued by a commission of inquiry after three years of study, marked the first time in Israel's 55-year history that a state-appointed body criticized government policy toward the Arab minority in such a sweeping way.
The report also said some Arab leaders in Israel encouraged violence, and that police used excessive force, including live fire and rubber-coated steel pellets, in quelling large crowds that took to the streets at the time in a show of support with the Palestinian uprising against Israeli occupation.
Mofaz said Tuesday that there will be no letup in the campaign. "Hamas is in distress because of our activity, but we will not stop the pressure until the terror infrastructure is dismantled either by the Palestinian Authority or by us," he told Israel Army Radio.
Asked about civilian casualties — several dozen bystanders have been hurt in the past two weeks — Mofaz said he has called off some strikes amid concerns that bystanders could be harmed. He said pilots have also diverted missiles at the last minute because they feared civilians could be hurt. However, the missiles are usually fired into crowded Gaza City streets, in several cases when the militants' car was forced to slow in a traffic jam.
In his radio interview, Mofaz also said Arafat was an obstacle to peace.
"Because this is the situation and because Arafat never wanted to reach an agreement with us ... I think that he has to disappear from the stage of history, and not be included in the ranks of the Palestinian leadership," Mofaz said.
Mofaz said he favors expelling Arafat, but that the timing has to be right. "I believe that Israel made a historic mistake by not exiling him two years ago," he said.
"With regard to the future, I think we will be compelled to deal with this issue within a relatively short period of time, very possibly even this year," Mofaz said. It was not clear whether he referred to the Western calendar or the Jewish year, which ends on Sept. 26.
Mofaz said the timing would have to be chosen carefully so as not to undermine Abbas, who Israel believes is serious about reaching a peace deal.
Palestinian Cabinet Minister Ghassan Khatib said Mofaz's threat only raised tensions, "but is consistent with the spirit of escalation of the Israeli leadership."
Israel's Cabinet has repeatedly considered expelling Arafat, but Israeli Prime Minister Ariel Sharon has blocked such a move, in part because of opposition by the United States and because his security advisers have cautioned against it.