As Powell prepares to leave, the fighting flares again in Bethlehem

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New fighting flared at the Church of the Nativity in Bethlehem yesterday as Colin Powell, the US Secretary of State, prepared to wind up his peace mission with no sign of a ceasefire.

General Powell will hold final talks with Yasser Arafat, the Palestinian leader, in Ramallah this morning before leaving for Egypt and then Washington. Last night, the Israeli Prime Minister, Ariel Sharon, showed signs of softening his stance on Mr Arafat. But the latest shooting at the Church of the Nativity ­ the evacuation of which had been a top priority of the Powell mission ­ underscored the fact that a truce is not yet in sight.

As the stalemate continued, with Palestinians insisting they would not issue a formal ceasefire statement until there was a complete end to the 18-day-old Israeli occupation of the West Bank towns, Mr Sharon called for an international summit to tackle the crisis.

He said on Israeli television that a summit of Arab, Israeli and Palestinian leaders would be convened by America and take place in the United States, perhaps as early as June.

The summit is one of several ideas being examined in the search for a formula to end the violence and restart negotiations. Significantly, Mr Sharon seemed to drop his opposition to involving Mr Arafat. The make-up of the Palestinian delegation was "a secondary issue", he said.

Mr Sharon blamed the exchanges of fire in Bethlehem on a refusal by the Palestinians to honour a compromise by which armed fighters within the church compound would be taken into Israeli custody, and those not connected with terrorism would be released.

But no such deal has been acknowledged by Mr Arafat's advisers and it has been rejected by the 240 Palestinians inside the church. Last night spokesmen for the Israeli armed forces said troops were not planning to force their way into the compound.