Mr Arafat said on Sunday that Palestinians would stage another intifada or uprising if Israel strayed from the path of peace and might take up arms to defend their right to pray in Jerusalem.
The Israeli leader said: "I don't intend to carry out any redeployment under these conditions, not even the first, until this is rectified publicly and unequivocally."
Israel was expected to begin the first phase of its limited withdrawal from the West Bank and release 200 prisoners later this week under the terms of the Wye agreement signed in Maryland on 23 October.
Mr Netanyahu said: "We are not prepared to move forward under the shadow of violence and the threat of violence." He said he would convene his cabinet tomorrow to see whether to see if the Palestinians had retracted.
Mr Netanyahu has moved so slowly in implementing the Wye agreement that it is unclear if he intends to do so at all. His slow progress and fierce rhetoric also serves to pacify his right-wing supporters.
A senior Palestinian official said that Mr Arafat had told the Israeli leader in a telephone conversation that he was not threatening violence.
In a further sign that the Wye agreement has done nothing to reduce tensions Ariel Sharon, the Israeli foreign minister, told Jewish settlers in the occupied territories to take as much land as they could. In remarks broadcast yesterday, Mr Sharon said everyone "should grab more hills. We'll expand the area. Whatever is seized will be ours. Whatever is not seized will end up in their hands".
Mr Sharon is a supporter of militant Jewish settlers in the West Bank and Gaza. These had already been establishing new settlements but the foreign minister's remarks may start a campaign of land-grabs on the West Bank where the level of violence is already increasing. Hanan Sfour, a Palestinian negotiator, called Mr Sharon's remarks "a call for war".
Mr Sharon also said that he was only repeating government policy. Given the number of new settlements springing up on the ground this may well be true. There are 170,000 Jewish settlers in the West Bank and Gaza, which are home to 2.5 million Palestinians. The Wye agreement does not limit settlement expansion, which is now greater than at any time since 1967.
Three Israeli soldiers were killed and four wounded by a bomb planted beside the road in south Lebanon yesterday as they went for firing practice near an Israeli base at Markaba, in the centre of the zone occupied by Israel. Hezbollah, the militant Islamic Lebanese guerrilla movement, claimed responsibility.
The explosion raises the number of Israeli soldiers killed to 15 this year. Another 84 have been wounded. The Israeli-run South Lebanon Army has suffered heavier casualties over the same period with 31 killed, mostly by roadside bombs.
Israel and the SLA are reported to have killed 28 Hezbollah guerrillas over the same period.Reuse content