The US State Department had announced earlier in the week that Secretary of State Colin Powell and National Security Adviser Condoleezza Rice would meet a group of Palestinian Authority (PA) cabinet ministers to 'exchange views on a wide range of issues, including a renewal of security co-operation'. The Palestinian group will include Interior Minister Abdel Razaq Yehiya, who met Israeli Defence Minister Binyamin Ben Eliezer on 5 August in the first public meeting at this level for two years.

However, on the eve of the meeting, the hawkish US Defence Secretary Donald Rumsfeld effectively dismissed the talks in advance, questioning the integrity of the PA and giving one of the clearest US endorsements of Israel yet.

'There is no question but that the Palestinian Authority has been involved with terrorist activities, so that makes it a difficult interlocutor,' he said in a public meeting with Pentagon employees.

Rumsfeld went on to question whether Israel should withdraw from territory it illegally occupied in the wake of the 1967 war. 'My feeling about the so-called occupied territories are that there was a war, Israel urged neighbouring countries not to get involved in it once it started, they all jumped in and they lost a lot of real estate to Israel because Israel prevailed in that conflict,' he said.

Plans for a phased Israeli withdrawal from the recently reoccupied Palestinian areas formed the basis of an Israeli-proposed truce, which required the PA to clamp down on armed Palestinian groups in return for the Israeli pullout. However, Palestinians have accused Israel of reneging on their side of the bargain, hours after PA officials gave preliminary approval to the deal on 7 August.

'Israel went back on its position of Monday [5 August] under which the security plan would also be applied to Bethlehem after Gaza, saying it would only be applied to Gaza, and adding many new conditions,' Nabil Abu Rudeina, a close aide to Palestinian leader Yasser Arafat, said on 8 August.

Israel's reluctance to withdraw was underlined later that day when Israeli tanks swept into the northern Gaza Strip destroying houses during what Israel claimed was a search for Palestinian militants. A Palestinian policeman was killed and two civilians wounded during the raid. Two Palestinians in the West Bank town of Tulkarum were shot dead by undercover Israeli units.

In another move set to heighten Palestinian anger, Israeli Interior Minister Eli Yishai on 6 August threatened to revoke the citizenship of Israeli Arabs who have been involved in attacks against Israelis. The proposal provoked outrage among international human rights activists but was praised by Israeli Prime Minister Ariel Sharon. Some 20 per cent of Israel's population is Arab. 'Such people cannot have citizenship of the state of Israel and enjoy all its conditions... and at the same time pose a threat to its existence,' Yishai said. He was speaking after 13 Israelis had been killed in a suicide bomb attack on a bus in northern Israel on 4 August.