The Israeli Prime Minister survived possible defeat in the Knesset on Monday night by appeasing the far right, who are opposed to the Wye Agreement with the Palestinians. David Bar-Illan, the Prime Minister's communications director, said yesterday that Israel was unlikely to carry out the second stage of the handover of land.
The crisis within Mr Netanyahu's government and the worst rioting for two years on the West Bank is beginning to overshadow the visit of President Bill Clinton at the end of the week, during which he will visit Palestinian- run areas.
Most of the 2,400 Palestinian prisoners held by Israel are now on hunger strike, and sympathy marches are leading to increased violence throughout the West Bank. Among the casualties was a nephew of Saeb Erekat, the chief Palestinian negotiator, who was shot in the head by Israeli troops.
Mr Erekat said yesterday: "Doctors told me today that Nasser is clinically dead.
"I hold the government of Netanyahu responsible for the escalation against the Palestinian people and for suspending peace moves."
Mr Netanyahu says he will not release prisoners with "blood on their hands", but the Israeli prison service says that only 430 of the Palestinians in jail are in this category.
Mr Netanyahu has tried to keep his coalition together by presenting the Wye deal as a triumph over the Palestinians. That has fuelled Palestinian protests and angered the United States, which has called for both sides to implement the terms agreed in October.