ISRAEL yesterday rejected a truce from Yasser Arafat and instead demanded the Palestinian Authority crack down on militant groups.

Yasser Arafat has appealed to Palestinian militants to halt attacks on Israelis – and his newly-appointed security adviser urged Washington to restrain Israel – in a bid to give the US-backed peace plan another chance.

THE militant group Hamas threatened revenge yesterday after Israel killed four of its members in a missile strike and declared anyone in the group a target for “liquidation.”

BELEAGUERED Palestinian President Yasser Arafat faced new pressure yesterday after an Israeli newspaper said the army expected him to be sidelined by his own people in six months.

A Palestinian woman and her two-year-old daughter were shot dead today while riding in a taxi in the Gaza Strip, according to Palestinians, who claimed Israeli troops were responsible.

The Palestinian Authority was in turmoil today, after two security chiefs defied dismissal orders, mounting a challenge to Palestinian leader Yasser Arafat.

Some 200 Palestinians who were holed up in the offices of West Bank Preventive Security Service chief Jibril Rajoub in Beitunya, west of Ramallah, surrendered to Israeli defence force troops this afternoon, according to reports.

Israeli tanks and assault helicopters have launched an attack on the hillside headquarters of the Palestinian security chief.

Israeli troops pulled out of the Bethlehem area early today, Palestinians said, boosting chances for a truce to end nearly 18 months of violence.

Israeli forces clashed with Palestinians today at a refugee camp and entered a town after a woman suicide bomber blew herself up at an Israeli army checkpoint in the West Bank.

Palestinian and Israeli security commanders have resumed their meetings, signalling a softening of an Israeli policy breaking off contact with the Palestinian Authority after a string of suicide attacks.

The Israeli military has tightened travel restrictions in the wake of the weekend's devastating suicide bomb attacks.

Israel today accepted a US ceasefire proposal aimed at ending eight months of fighting with the Palestinians but appears to have little confidence in its success.

The home of a West Bank security chief was attacked by an Israeli tank today after Prime Minister Ariel Sharon defended his decision to use war planes against Palestinian targets.