Israel decided in principle to exile Yasser Arafat after a wave of suicide bombings, touching off protests by tens of thousands of Palestinians and drawing pledges by some to defend him at his headquarters.

Supporters of Palestinian President Yasser Arafat rally in front of his office in the West Bank city of Ramallah, Sept 11, 2003. Arafat told thousands of Palestinians rallying to his side that he would stay in his headquarters come what may after Israel threatened to expel him.    [Reuters]

Israel's security cabinet vowed to "remove" Arafat after a meeting on Thursday. It made no direct reference to expelling Arafat but sources close to the government said it had asked the army to draw up plans to exile him, although not immediately.

"You are brave people, my loved ones. Abu Ammar is staying here," Arafat later told a huge crowd at his headquarters in the West Bank city of Ramallah, using his nom de guerre as he blew kisses and flashed the V-for-victory sign.

"You are the ones who are capable of responding to this Israeli threat," he said, flanked by security guards, as the crowd vowed to support and defend him.

Palestinian Prime Minister-designate Ahmed Qurie responded to Israel's decision by suspending efforts to form a cabinet, saying that expelling Arafat could "blow up" the Middle East.

A wave of Palestinian suicide bombings and a series of Israeli air strikes that have killed 12 Islamic militants since a suicide bombing on August 19 have plunged the region into new violence and all but killed off a U.S.-backed peace "road map."

The cabinet, which groups top government ministers and security officials under Prime Minister Ariel Sharon, met for several hours to discuss how to respond to two suicide bombings which killed 15 people in Israel on Tuesday.

"The events of recent days prove again that Yasser Arafat is the absolute obstacle to any process of conciliation between the Israeli and Palestinian people," Sharon's office said.

"Israel will act to remove this obstacle in a manner that that will be determined separately."

ULTIMATUM

Israel and the United States have accused Arafat, 74, of fomenting violence during the three-year-old Palestinian uprising against Israeli occupation in the West Bank and Gaza Strip. He denies the charge.

The decision amounted to an ultimatum to the Palestinians to crack down on Islamic militant groups, as mandated under the road map, political analysts said. "It is more of a political threat, an ultimatum," said Eli Karmon, an Israeli counter-terrorism expert.

It also seemed intended to further isolate Arafat and signal to Qurie he must act independently and rein in militant groups.

Instead, it prompted the biggest outpouring of support for Arafat in many months. His Fatah political movement urged followers to occupy Arafat's headquarters night and day to prevent an army assault, and some appeared to be bedding down.

"This is an adventurous and grave decision (by Israel) that... finishes off any attempt by me to form a new cabinet," Qurie said. "(If implemented), this grave and adventurous decision would not only blow up the Palestinian territories but also the entire region."

The United States said that expelling Arafat would not be helpful. The European Union expressed "great concern."

Any attempt to expel Arafat, who controls the most important Palestinian security forces, could end in bloodshed. He keeps a pistol at his side and has said he would be ready to die rather than give himself up.

It is not clear how Israel would pluck Arafat from his headquarters, even though they are half demolished from previous army raids, or where he would be cast into exile.

He has in the past taken refuge in Jordan, Lebanon and Tunisia but such states would be unlikely to welcome him now.

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