ISRAEL: The bitter personal conflict between the Israeli Prime Minister, Mr Ariel Sharon, and the Palestinian Authority President, Mr Yasser Arafat, has reached new heights.
In a report sent to Washington, Mr Sharon's office claims that Mr Arafat sent millions of dollars of Saudi aid intended for the Palestinians to his wife, Suha, in Paris. The report was leaked to an Israeli newspaper.
Mr Arafat denied the allegation, said Mr Sharon had fabricated and leaked it, and threatened legal action against the Israeli press.
The timing of the leaked report could not be more potentially damaging to Mr Arafat.
Key officials from the quartet of key Middle East peacebrokers - the US, Russia, the EU and the UN - are gathering in New York today.
Pressure is expected to be put on the Secretary of State, Mr Colin Powell, to soften the Bush administration's firm stance against any further direct contacts with Mr Arafat.
The Egyptian and Jordanian foreign ministers are also due to lobby the same forum on Mr Arafat's behalf.
Also today, the Egyptian President, Mr Hosni Mubarak, hosts the Israeli Defence Minister, Mr Benjamin Ben-Eliezer, with Mr Arafat's future also high on the talks agenda.
Mr Sharon's report alleges that Mr Arafat transferred $5.1 million of aid money from Saudi Arabia to his account in Paris, partly to maintain his wife and daughter there, and that Mr Mahmud Abbas (Abu Mazen), Mr Arafat's longtime deputy, transferred $70 million of Palestinian Authority money to Europe.
Mr Arafat has sent his own letter to Mr Powell, outlining reforms he has overseen in recent weeks and urging that Israel withdraw its troops from West Bank cities.
It is a time of economic collapse in Palestinian Authority areas. Unemployment is running at far above 50 per cent in many districts, the cities under Israeli control have been closed for three weeks and there are intermittent demonstrations against both Israel and the Palestinian Authority in Gaza by thousands who say they can no longer find food to eat.
Mr Arafat moved quickly to deny the allegations against him. He said they showed "how low" Mr Sharon was prepared to sink in a campaign to bring him down.
Mr Arafat's lawyer, Mr Osama Sa'adi, said he had sent a letter to the daily Yediot Ahronot, which ran the story over its first three pages, demanding a retraction.
Mr Ahmed Tibi, an Israeli Arab Knesset member and adviser to Mr Arafat, said the publication was designed to deflect attention from Israel's "theft" - its refusal to release hundreds of millions of dollars in tax revenue, collected from Palestinians working in Israel, to the Palestinian Authority.
Mr Sharon has said it will only be transferred when he can be confident it will not be used "to fund terrorism".
Meanwhile, in Gaza yesterday, Israeli F-16s destroyed a three-floor building in Khan Younis, which the army said housed a weapons factory.
Palestinian sources said the air-strike was a failed bid to assassinate the Hamas leader who lived there.
Taking advantage of the panic caused by the raid, Hamas gunmen shot dead an alleged Palestinian collaborator with Israel, Abdel Hai Sababi, who was being held in a court-house detention room nearby during his trial.
In the West Bank, troops shot dead a Palestinian man during a confrontation with stone-throwers in Nablus's Balata refugee camp.
Troops also intercepted a Palestinian suicide bomber who had allegedly failed to persuade Israeli Arabs from the northern town of Umm al-Fahm to drive him to his planned bombing site.