meeting with Palestinian leader Yasser Arafat in Ramallah was "useful and constructive" but admitted that no progress was made in reaching a ceasefire.

"We discussed a variety of issues and look forward to more discussions," with Palestinian staff, he told reporters after talks with Arafat, who remained trapped in his Ramallah headquarters, surrounded by heavily armed Israeli forces.

SNIPERS

Arafat did not talk to reporters waiting outside for what Palestinian officials describes as "fear of Israeli snipers," who are apparently hold up in a nearby building. As Powell was rushed away by heavily armed US and Israeli security forces, news emerged that Israel was ready for a deal with Palestinian gunmen occupying the Church of the Nativity in Jesus’ birthplace Bethlehem.

"The terrorists have two choices: or stand trial (before a military tribunal), or leave the country and sign a document to that effect," said Ra’anan Gissin, the Senior Adviser of the Israeli Prime Minister. Gissin said the 200 gunmen trapped inside the church will be allowed to leave the area "with save passage secured by either the Red Cross or any other aid agency."

GUNMEN WAITING

But he noted that although "negotiators accepted" the deal "the gunmen were still awaiting clearance from the Palestinian Authority or Yasser Arafat." He stressed however that those responsible for the recent assassination of the Israeli Tourist Minister, which he said are hiding in Arafat’s headquarters, would not be allowed to leave. "They have to stand trial," he said.

He also confirmed that reporters and aid agency’s will be allowed to visit several area’s that were closed by the military, including a Palestinian refugee camp in Jenin, where Palestinian officials said possible 500 people were "massacred" by Israeli soldiers.

HOUSE-TO-HOUSE FIGHTING

The Israeli Government strongly denied the accusations, saying that only "dozens" of civilians died in what was described as house to house fighting in Jenin, which Israel says is a hotbed for terrorist attacks.

"We had to destroy the terrorist infrastructure in Jenin," said Israeli Adviser Gissin.

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