Sharon defiant as Bush urges West Bank withdrawal

War on terrorism: Middle East

Israeli troops entered a West Bank village on Wednesday despite US President George Bush's request that Israel withdraw from Palestinian areas "as quickly as possible." Three Palestinians were killed and seven wounded in exchanges of fire.

The move threated to plunge Israel's relations with the United States to their lowest point for years after President Bush demanded that Israeli Prime Minister Ariel Sharon withdraw his army from newly invaded parts of the West Bank.

Intense diplomatic efforts were under way on Tuesday night to persuade Mr Sharon to abide by a US call for him to "immediately" and permanently end the largest military incursions into the occupied territories since the start of the Palestinian intifada.

Despite this, three Palestinians were killed in Tulkarem early on Wednesday. Palestinians said Israeli soldiers ambushed the three men from a cemetery. The Israeli military said the soldiers spotted armed Palestinians who were about to open fire, and shot them.

Also in Tulkarem, an army bulldozer demolished the home of Raed Karni, a local militia leader accused by Israel of involvement in killing five Israelis.

President George Bush – who is said to be losing patience with Mr Sharon – was expected to repeat the US's unusually vehement call to the Israeli Foreign Minister, Shimon Peres, who is visiting Washington.

The European Union envoy, Javier Solana, was due to meet Mr Sharon in Jerusalem last night and is certain to have emphasised the message, amid fears among some international diplomats that Israel's actions could destroy the Palestinian Authority, bringing all-out anarchy to the seething and unstable occupied territories.

"The situation has never been worse," said one Western source. It is understood that some in the international arena – including Britain – are pressing the US to take a tougher line with Israel, arguing George Bush's popularity at home is high enough to allow him to risk angering the powerful American pro-Israel lobby. "The whole thing could collapse around us unless the Americans stop pussy-footing," the source said.

On the ground, the picture was dismal. In Bethlehem – the scene of nearly half the 25 deaths of the past six days – there was a pause in the gunfire as the Vatican's envoy to the Holy Land, Archbishop Pietro Sambi, and several bishops led thousands of Palestinians on a march to Manger Square and the Church of the Nativity chanting "Sharon, Sharon. Hear, hear. Bethlehem is an Arab city." But, last night, the crash and thump of shells from the Bethlehem area could be heard in central Jerusalem.

Publicly, Israel was defiant in the throes of one of its most severe disagreements with the US, its closest ally and the source of huge amounts of funds and weapons. The Defence Minister, Binyamin Ben-Eliezer, said that the US's demand for withdrawal was "not valid", adding that Israel has "no intention" of staying in Palestinian-ruled areas, or of reconquering territory handed back to the Palestinians under the Oslo accords.

But, once again, Israel stands accused of placing its interests above the White House's pleas for co-operation. The US has repeatedly asked both Mr Sharon and Yasser Arafat to stop the bloodshed in the Middle East because it aggravates Arab and Muslim anger over the war in Afghanistan, and to restore the shattered ceasefire.

At least three Palestinian paramilitary organisations have violated the truce but there is a strong feeling among mediators in the international community that Mr Sharon bears the brunt of the blame.

Behind the scenes, Israeli Foreign Ministry officials – who are generally moderate by Israeli standards – say that the Prime Minister will have to respond to the US's demand for withdrawal, probably after taking several days to "save face", and to avoid a domestic backlash from an increasingly restive and bellicose Israeli hard right, whose loyalties are showing signs of shifting away from Mr Sharon to Benjamin Netanyahu, another hardliner who is circling menacingly.

Even if Mr Sharon does withdraw for now, it will not remove suspicions held in parts of the international community that he is steadily creating a situation in which the occupied territories will become ungovernable, so that the Palestinian Authority collapses from within. This would enable him to seize back strategic parts of the West Bank handed to the Palestinians under the Oslo agreements. Whoever then holds sway in the West Bank and Gaza – possibly Yasser Arafat but perhaps a fragmented collection of warlords and militias – would have no international legitimacy. Mr Sharon would have no difficulty persuading the outside world that they are "terrorists".