Israel holds Arafat 'directly responsible' for Tel Aviv attack

Israel has called off its self-declared policy of restraint.

The Israeli cabinet says it holds Palestinian leader Yasser Arafat directly responsible for the bombing in Tel Aviv on Friday.

It said in a statement it would take all actions necessary to protect Israeli citizens, but did not elaborate.

The move comes hours after a suicide bomber killed 17 young people and wounded 90 outside a Tel Aviv disco.

All but one of those killed and many of the wounded were recent immigrants from the former Soviet Union.

The Israeli cabinet said after a seven-hour emergency session - an extremely rare occurrence on the Jewish Sabbath - that it held Palestinian leader Yasser Arafat directly responsible for Friday night's blast and other recent attacks.

Arafat has formed a "coalition of terrorism" in the areas under his control, the cabinet said in the harshest condemnation of the Palestinian leader in eight months of fighting.

In the West Bank town of Ramallah, Arafat said he was ready to work for an "immediate and unconditional cease-fire", but did not say what steps he was prepared to take.

Israeli cabinet ministers have dismissed the offer, saying they would not take it seriously unless Arafat arrested Islamic militants and reined in his security forces.