Rabin extends Palestinian ban till end of holiday: At Passover time, Palestinians are sealed off in the occupied territories, while tourists in Tunisia visit the world's oldest synagogue

ISRAELIS were last night celebrating the start of the Passover festival, as Palestinians in the occupied territories prepared to undergo another seven days of road blocks, increased military patrols and travel restrictions, confining them to the West Bank and Gaza Strip.

Yitzhak Rabin, the Prime Minister, said the ban on Palestinians entering Israel, which came into force six days ago after an escalation in violence, would remain until the end of Passover on Monday. With many Israelis enjoying family gatherings to mark the Jewish exodus from Egypt, Mr Rabin decided to maintain the closures to instil a sense of security in what he has in recent days begun to term 'sovereign Israel'.

Since the occupied territories were sealed, attacks on Jews by Palestinians inside Israel proper have declined and some confidence has returned to the Israeli streets. At the same time tension has mounted in the occupied territories, as more than 150,000 Palestinians who normally cross the Green Line to work in Israel have been confined to their homes. Palestinians in the West Bank and Gaza are also barred from Israeli- occupied east Jerusalem, the Arab section of the city, which Israel has annexed, thereby separating families and hitting trade.

Palestinian Christians yesterday complained that they had been denied access to Jerusalem's holy sites over Easter.

Despite Mr Rabin's assurance that the restrictions will be reviewed, all the signs are that the latest closures have ushered in a new phase in Israeli policy towards the occupied territories: from now on severance is to be the order of the day, and hopes of co- existence are fast receding.

On Sunday the Israeli cabinet is to meet to draw up plans for a more permanent economic disengagement, aimed at loosening Israeli reliance on Palestinian workers and cutting back the flow of goods between both sides. Mr Rabin has made clear that the situation 'will not return to what it was before'.

The seriousness of the new policy from an immediate economic point of view is already dawning on both Palestinians and Israelis. For Israel the removal of Palestinian workers should have provided a chance to reduce high Israeli unemployment, particularly among new immigrants. But despite Mr Rabin's call for a national effort to overcome the difficulties, only a handful of Israelis have taken up the poorly paid and often lowly positions vacated when Palestinians were barred.

The Israeli construction industry in particular has been badly hit by the loss of Palestinian building workers. The flower harvest, now in full swing, has also been badly affected despite the allocation of Israeli soldiers to stand in for the Palestinians. One Israeli farmer commented yesterday: 'It took 22 women soldiers to pick 6,400 flowers which one Arab worker would have done.'

With Arab countries doing little to underpin the Palestinian economy, jobs in Israel are vital and Palestinian leaders say losses caused by the closure have reached pounds 1.6m.

The impact of the closure policy on the peace process remains unclear, as Palestinian leaders yesterday once again adjourned a decision on whether to return to the negotiations.