Israel shells Arafat's Ramallah offices

Israeli forces have entered Palestinian leader Yasser Arafat's headquarters and exchanged fire with his security guards.

Israeli defence minister Binyamin Ben-Eliezer said Israel had no intention to harm Arafat physically, while Sharon left open the possibility that Arafat could be expelled from the West Bank at a later stage.

The move comes in response to a suicide bomb attack in Netanya that killed 20 Israelis celebrating the Jewish Passover.

Earlier Israeli troops entered the walled compound in the West Bank town of Ramallah, to which Arafat has been confined by Israel since December.

Palestinian officials said there were exchanges of fire just yards from Arafat's office, and that Israeli soldiers demanded over a loudspeaker that Arafat's security guards surrender.

Other officials said the walls of Arafat's compounds were shelled by Israeli tanks, and that parts of the compound were on fire.

Sharon confirmed that Israeli forces were inside Arafat's compound, but would not give details of the Israeli operation.