Bethlehem siege talks break down over role of EU

The siege of Bethlehem's Church of the Nativity was only a few minutes from coming to an end when negotiations snagged on a new obstacle yesterday, prolonging the misery for the scores of people inside the basilica for a 38th day.

The agreement broke down on several fronts, including a disagreement over whether a European official should be allowed into the shrine to remain with 13 Palestinian militants, who were to remain in the church until an agreement had been reached on their country of exile.

The deal ran into trouble at the last moment, when coaches had drawn up in Manger Square, the plaza outside the church, and were waiting – surrounded by Israeli armed forces – to carry off scores of others who had been in the church for more than a month.

As it became clear that yet another agreement was unravelling, the coaches left and the world's television crews were left to endure another day of waiting.

Early yesterday, Israeli and Palestinian negotiators said a deal was in place in which everyone in the church – except for the 13 – would leave. These were to include 26 Palestinians whom Israeli regards as militants, to be deported to the Gaza Strip. There are at least 130 people inside, including nuns, priests, Palestinian security men and civilians.

Sources close to the negotiations told The Independent that the 13 Palestinians had wanted an EU representative to join them in the church as a confidence measure, not least because they feared an Israel attack. Israel has repeatedly said that its forces will not enter the church and – although its snipers have shot dead people in the compound – they are thought unlikely to do so.

It was unclear who had raised the objection. Some reports blamed the Americans, whose negotiators are led by the CIA. Last night, Israeli and Palestinian negotiators blamed one another. "They torpedoed an effort which would have brought almost to a complete close the crisis,'' said an Israeli military spokesman, Capt Jacob Dallal. Ala Hosni, the Palestinian police chief in Bethlehem, confirmed that the dispute had arisen over the proposed European envoy but said that the representative had been part of the agreement and that Israel had reneged on it.

A dispute is also understood to have arisen over the collection of weapons. There had been an agreement for the 13 men to deposit them in a police post in the church, but this was also destroyed by mistrust and hostility on both sides. Mr Hosni blamed the Israelis. "After we gave them two hours to prepare themselves, they surprised us by rejecting everything we had agreed upon. The ball is in the Israeli court now."

The search continued for a country willing to take the 13 militia men – 10 from Fatah or its affiliated al-Aqsa Martyrs Brigades militia, and three from Hamas. Jordan refused to accept them, issuing a statement saying that it objected in principle to the deportation of the Palestinians.

The Italian cabinet confirmed the government's decision not to accept them.

The Israeli Foreign Minister, Shimon Peres, said that Spain might be willing to take them. But, like everything else in this saga, the deal was far from certain.