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Israel Halts Peace Moves

Israeli Cabinet ministers assembled around a TV set and watched a video of a Palestinian mob ambushing an Israeli soldier. When the tape stopped, the decision was unanimous: Israel was suspending its West Bank troop withdrawal.

Prime Minister Benjamin Netanyahu said Wednesday's attack, in which the trapped soldier was repeatedly struck in the head, was a result of incitement by the Palestinian Authority against Israel.

Netanyahu said he would hold up implementation of the land-for-security agreement until Palestinian leader Yasser Arafat publicly dropped plans to declare statehood in May and accepted Israel's criteria for the release of Palestinian prisoners.

The Palestinians said the conditions were unacceptable and appealed to the United States for help. U.S. State Department spokesman James Rubin sided with the Palestinians, saying the Wye River peace agreement "should be implemented as signed."

The crisis hit just 10 days before President Clinton was to arrive in the region to oversee the next phase of the peace accord.

In mid-December, 5 percent of the West Bank was to be transferred from Israeli control to joint jurisdiction and Israel was to release 250 more Palestinian prisoners.

White House spokesman David Leavy said that despite the crisis, the Clinton trip was still on. A White House advance team was to arrive in the region Thursday.

In Israel, meanwhile, the new confrontation with the Palestinians helped stabilize Netanyahu's shaky coalition.

In response to the cabinet's decision to suspend implementation of the Wye agreement, hard-line coalition legislators said Thursday they would not support an early elections bill as initially planned.

The legislation was to have come before parliament Monday, but its sponsors said they might delay the vote because they no longer have a majority.

The latest cycle of violence began Wednesday morning when an Arab street cleaner was stabbed to death, apparently by a Jewish extremist who may have killed several Palestinians, in a mixed Arab-Jewish neighborhood of Jerusalem.

In response, dozens of masked Palestinians blocked roads in traditionally Arab east Jerusalem with burning tires and threw stones at cars. Israeli police fired rubber bullets.

Also Wednesday, students bused to the West Bank town of Ramallah to demonstrate for the release of Palestinian prisoners began stoning a car with Israeli license plates while shouting "Jew, Jew!" The car was driven by a man wearing a skullcap and carried an Israeli soldier.

The driver escaped from the moving vehicle and ran, while the soldier was pulled from the car and beaten before he was able to get up and run to safety. The soldier was hospitalized with head injuries.

Early Thursday, a shack in Tel Aviv housing five Palestinian laborers from the Gaza Strip was set on fire, and police said they were investigating whether the arsonists had political motves. The fire was quickly extinguished and the laborers escaped unharmed.

After the attack on the Israeli soldier, Netanyahu convened his security cabinet and played a videotape of the incident, which was televised in Israel.

Justice Minister Tsahi Hanegbi said the atmosphere in the cabinet room was very tense during the screening.

"There was a unanimous decision," Hanegbi told Israel army radio Thursday. "We all said to ourselves that we had to stop this quickly because if we do it after we give the territory, we will be shirking our responsibility."

Israeli accusations of peace deal violations are matched by Palestinian claims that Israel is not keeping its word.

The Palestinian Authority blamed Israel for the latest crisis, saying it raised tensions by refusing to release Palestinian prisoners jailed for anti-Israeli activities. It has also assailed Israeli settlement expansion as a violation of signed accords.

Israel is furious with the Palestinian Authority for threatening a unilateral declaration of statehood next May, when the "final status" negotiations were scheduled to end.

"Mr. Netanyahu is trying to create a crisis before the arrival of President Clinton. We consider his conditions unacceptable," said chief Palestinian negotiator Saeb Erekat.

In the Wye agreement, Israel promised to withdraw from an additional 13 percent of the West Bank and release 750 Palestinian prisoners by January. In a first stage last month, it withdrew from 2 percent of the area and set free 250 prisoners, but most were criminals, not security prisoners, as the Palestinian Authority had expected.

Arafat raised the issue with President Clinton earlier this week.

About half of the 2,500 Palestinians held by Israel are members of Arafat's Fatah faction. There has been growing anger in Fatah ranks over the Palestinian Authority's failure to get detainees released.

Jewish settlers, who oppose the latest peace deal, said that they would put Ramallah under siege if the army did not do so in retaliation for the attack on the soldier. "We don't intend to allow Jews to be attacked without a response," said settler leader Aharon Domb.

©1998 CBS Worldwide Corp. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report

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