Israel's decision to stop doing business with Mr Yasser Arafat sparked alarm in the Arab world and beyond yesterday, with the US saying it will stick with the Palestinian leader, and a UN official warning the two sides are nearer than ever to "a full military confrontation".
The government of Israel's Prime Minister, Mr Ariel Sharon, cut all ties with "irrelevant" Mr Arafat after a bus ambush in the West Bank killed 10 Jewish settlers, and vowed to send whatever force it takes into the Palestinian territories to track down the militants he has failed to imprison.
The Arab League Secretary, Gen Amr Mussa, called for a meeting of the UN Security Council as soon as possible to try to find a way to restore peace in the Middle East.
Gen Mussa said that, after telephone contacts with Mr Arafat and a majority of Arab foreign ministers, agreement had been reached "to seek the convening as soon as possible of a meeting of the UN Security Council." Gen Mussa also said he had been in contact with EU foreign policy chief, Mr Javier Solana, and that "international and Arab consultations would continue." Arab ambassadors at UN headquarters in New York had been instructed to work for the holding of the meeting, he said, adding that the League's follow-up committee would meet on January 4th and 5th in Cairo to discuss developments in the occupied territories.
Gen Mussa said the Palestinian Authority should cease all contact with the Israeli government, adding that he believed there was no longer any point in speaking of peace with Israel. "The United States must decide on the ways to save their peace efforts, if they have the will," he said.
In Amman, the Jordanian Foreign Minister, Mr Abdel Ilah Khatib, said a UN meeting should "examine the Israeli aggression against the Palestinian people, ways of stopping it and ensuring international protection". He called on the international community to "deploy every effort to break the cycle of violence and prepare the ground for a resumption of negotiations."
The UN special envoy to the Middle East, Mr Terje Roed-Larsen, told CNN television, "I think we are close as we've ever been to a full military confrontation between Israel and the Palestinian Authority. "Undoubtedly if that happens this will either, in the best case, weaken the institutions of the Palestinian Authority so much that there will be very little central authority, or the Palestinian Authority will be completely crushed," he warned.
He called for Mr Arafat to make a final effort to comply with Israeli and international demands to arrest all extremist groups.
France also said it would be a mistake to stop dealing with Mr Arafat. President Jacques Chirac would seek a statement from a two-day meeting of European Union leaders in Belgium from today, calling for a resumption of peace negotiations "without delay and without preconditions", his spokeswoman, Ms Catherine Colonna said.
Pope John Paul yesterday condemned violence by both Israelis and Palestinians, saying people were being crushed by "two different extremisms" that were disfiguring the face of the Holy Land.
The Pope made his comments in an address to open a meeting of Catholic religious leaders from the Middle East, which he called to express his concern.