The Israeli Prime Minister, Mr Ariel Sharon, has frozen a withdrawal of troops from four Palestinian cities they entered almost two weeks ago. He is demanding that the Palestinian Authority's security forces arrest several men on a list of alleged leading militants compiled by Israel.
Apparently choosing to avoid an unpleasant encounter with President Bush, Mr Sharon yesterday informed American officials that he intended to postpone a trip to the US in 10 days, citing the "security situation".
The PA's President, Mr Yasser Arafat, has arrested two members of the Islamic Jihad movement, and last night detained the group's Gaza-based leader Abdullah Shami, after gunmen shot dead four Israeli women in Hadera on Sunday. But there have no wider arrests among Hamas and other militant forces
Mr Arafat, who met the Pope in Rome yesterday, called on Mr Sharon "to go back to the negotiating table". The ongoing troop presence is causing friction between Mr Sharon and his Foreign Minister, Mr Shimon Peres, who is finalising a new peace initiative.
The Peres plan reportedly provides for Israel to withdraw from the final third of the Gaza Strip it still occupies, evacuating 7,000 settlers, as a "goodwill gesture", significant further land handovers in the West Bank, the establishment of an international commission to address the issue of Palestinian refugees, and deferment of debate on the status of Jerusalem.
Mr Sharon is said to dislike almost every clause. Mr Peres is to meet Mr Arafat in Spain on Friday. Mr Sharon is said to oppose the meeting.
The US State Department is still demanding that Israel withdraw "immediately" from the Palestinian cities, where Israel sent troops following the October 17th assassination of its Tourism Minister Rehavam Ze'evi. A spokesman last night also berated Israel for the "highly provocative" demolition of six Palestinian homes in East Jerusalem.
Although Israeli and Palestinian security chiefs have been holding lengthy meetings on the terms for a further pull back - Israeli troops did leave Bethlehem and Beit Jala overnight on Sunday - Mr Arafat's West Bank security chief, Mr Jibril Rajoub, said there was still "a wide gap" between the sides.
Palestinian officials say they believe Mr Sharon is bent on desensitising the international community to the notion of a renewed Israeli military presence on land turned over to Mr Arafat's control, with a view to a permanent reoccupation. Israeli officials deny this, and cite fears of new bombing attacks if they withdraw.
To that end, the Israeli Defence Minister, Mr Benjamin Ben-Eliezer, said yesterday that a planned Hamas suicide bombing had been foiled on Sunday in Tel Aviv. And last night, Israeli security forces were on frantic patrols in the Hadera area and further north, setting up road-blocks and ordering residents in some neighbourhoods to stay in their homes, acting on "hard information" that Hamas militants were en route to carry out an attack there.
Rather than leaving more Palestinian territory, indeed, Israeli forces moved deeper into Tulkarm yesterday, with some military officials claiming this operation was related to the nearby Hadera security alert. They also entered a Gaza refugee camp - again, inside an area ostensibly under Mr Arafat's control - in a failed effort to trace the men who fired mortar shells at an adjacent Jewish settlement.
In the Israeli city of Ra'anan yesterday, a senior navy officer woke up to find, by his bedside, a fire extinguisher rigged to explosives and a mobile phone. Police sappers defused the device.