Israel continues to accuse Yasser Arafat, the Palestinian leader, of giving a "green light" to suicide bombers by not arresting them. Hamas, the Islamic militant organisation, said it was giving "the mercy bullet" to the peace process.
Mr Dahlan said: "We will not accept or deal with Israeli conditions and will treat them as if they didn't exist."
Mr Arafat, who is on a nine-day tour of east Asia, blames the recent increase in violence on the building of a new Jewish settlement in Jerusalem.
Benjamin Netanyahu, the Israeli Prime Minister, is trying to convince the outside world that it is Mr Arafat who is guilty of undermining the Oslo peace process, while his own hands are clean.
There was continuing rioting in Hebron and Bethlehem yesterday with 200 Palestinian police in Hebron forming a barrier to stop stone throwers attacking Israeli soldiers. General Moshe Yaalon, the head of Israeli military intelligence, said that Jibril Rajoub, the head of Preventive Security on the West bank, was fomenting the riots while pretending to rein in the rioters. Mr Rajoub said: "My guys were on the streets to try to control the situation."
The United States has so far refused to endorse Israel's allegation that Mr Arafat gave a green light for the suicide attack. Madeleine Albright, the US Secretary of State, said there was no proof the accusation was true. Israeli analysts suggest this neutral position is to balance the American veto of two UN Security Council resolutions condemning the building of the Jewish settlement at Har Homa. The US wants to retain some credibility as a mediator in the eyes of the Palestinians.
It is unclear what Mr Netanyahu will do if there is another suicide bombing. General Amnon Lipkin-Shahak, the chief of staff, says Israel does not want to reoccupy the Palestinian controlled enclaves, which would touch off a wider war. But if it does not it is left with few options for preventing another bombing. Mr Netanyahu would also find it difficult to compromise unless he did so in the context of forming a coalition government.