Who Shall Lead The Palestinians?

A Palestinian cabinet minister on Thursday brushed aside President Bush's threat to withhold financial aid and said Palestinians would defy U.S. pressure to replace their elected leader Yasser Arafat.

Meanwhile, Israeli attack helicopters fired four missiles at the Palestinian Authority's fortress-like compound in Hebron Thursday after calling on Palestinians holed up there for a third day to surrender. The army has warned it will overrun the battered Hebron government complex if those inside refuse to come out.

Reinforcing his call for a new Palestinian leadership "uncompromised by terror," Mr. Bush had said late Wednesday that U.S. assistance to the Palestinians would be contingent on their embrace of reforms and rejection of terrorism.

"The call by Bush contradicts the principles of democracy claimed by the United States," Palestinian Telecommunications Minister Imad al-Falouji told Reuters. "No one has the right to intervene in the internal affairs of the Palestinian people."

Other countries did not endorse Bush's call for the ouster of Arafat, though British Prime Minister Tony Blair came closest to the U.S. position. French President Jacques Chirac, echoing comments of other European leaders, said, "It is for the Palestinian people, and them alone, to choose their representatives."

American diplomats, however, are meeting with top Palestinian officials even as the Bush administration calls for the ouster of Arafat as the leader of the Palestinian Authority.

Among the diplomats is Ronald Schlicher, who heads the U.S. consulate in Jerusalem, the main contact point for the Palestinians with the United States in the absence of formal relations.

A senior U.S. official said Wednesday that Schlicher was likely to have "a full range of contacts" with the Palestinian Authority whether or not he sees the Palestinian leader.

The Israeli military said 150 people in the Hebron compound have surrendered since early Tuesday, including at least 20 top fugitives, during short breaks in heavy machine-gun fire from the ground and helicopters gunships above. About 40 people, including at least 15 wanted men, remained inside Thursday, the military said.

"We know that a few wanted persons are inside and we intend to apprehend them," Brig. Gen. Ron Kitrey told Israel Army Radio. "We prefer to do it without a battle, but if it proves necessary there will be one."

Meanwhile, Israeli Attorney General Elyakim Rubinstein has ruled that Israel cannot deport families of Palestinian suicide bombers to other countries, a Justice Ministry spokesman said on Thursday.

But Rubinstein has yet to decide whether it would be legal to expel bombers' relatives from the West Bank to the Gaza Strip as a means of deterring further deadly attacks on Israelis.

Most of the attacks have originated from Palestinian-ruled areas of the West Bank instead of the Gaza Strip, which is fenced off from the Jewish state.

Israel's security cabinet had asked for a full legal review of the matter before taking action.

Mr. Bush re-issued his threat at a summit of major industrialized nations in Canada just hours after Arafat called new elections for next January and set plans to run again despite U.S. opposition. Opinion polls show Arafat the likely winner.

"I've got confidence in the Palestinians, when they understand fully what we're saying, that they'll make the right decisions," the president said.

But he warned: "I can assure you, we won't be putting money into a society which is not transparent and (is) corrupt, and I suspect other countries won't either."

Falouji scoffed at Mr. Bush's remarks, saying: "Bush is threatening something that does not exist, because the United States has never sent financial aid to the Palestinian people."

Key U.S. allies have expressed little enthusiasm for Washington's efforts to force Arafat out as part of a new Middle East policy aimed at ending 21 months of Israeli-Palestinian violence.

Violence also flared in the Balata refugee camp near the West Bank city of Nablus.

Palestinian officials and witnesses said a 19-year-old was killed when Israeli troops opened fire on stone throwers. The army said soldiers shot at the man because he was armed.

A senior U.S. official, who was with Mr. Bush at economics talks in Canada, said the United States would not interfere if Arafat won a free election.

But there would be consequences in the Palestinians' drive for a state, said the official, speaking on condition of anonymity. There must be a change in leadership to move forward, the official said.

President Bush, meanwhile, again sought to exclude Arafat, even if he won re-election as head of the Palestinian Authority.

"I meant what I said," Mr. Bush said at a news conference. "There needs to be change."

At the same time, the State Department spokesman Richard Boucher said meetings with Palestinian leaders were continuing.

"We deal with the leadership, the people who are responsible and who we think have a continuing responsibility to push forward, to control the violence, to make lives safer," Boucher said.

However, he said Secretary of State Colin Powell had no plans to meet with Arafat if Powell goes to the Middle East.

"The United States is not choosing good guys and bad guys among Palestinian leaders," Boucher said. "We know terrorists and we don't meet with them. Other than that, we will work with people within the Palestinian leadership."

At least 1,427 Palestinians and 548 Israelis have been killed since the start of a Palestinian uprising against Israeli occupation in September 2000 after peace talks stalled.