Security arrangements in areas of Palestinian self-rule emerged as a hot issue at the end of August following the killing of two Israelis by Hamas guerrillas.

Israeli police arrested 188 Palestinians for questioning following the killing of two construction workers near Tel Aviv. Hamas said in a statement that its guerrillas carried out the knife attack and said it would strike again twice before the end of the year. The statement said the attack was in retaliation for the 25 February killing of at least 30 Muslim worshippers in a mosque in Hebron.

The Hebron mosque is still closed. An official at the mosque says that Israel has built barriers creating different prayer halls. On 29 August, PLO chairman Yasser Arafat called on the Muslim world to protest against the action.

Israeli Prime Minister Yitzhak Rabin called on 30 August for the Palestine National Authority to fight Islamic militants who attack Israelis. He said that if the authority did not make an effort to curb attacks, Israel would have to reach 'conclusions,' but he did not elaborate. Rabin was speaking in response to questions in an Israel Television interview.

Israeli security officials have warned they will pursue Palestinian assailants into self-rule areas if PLO police do not act against them.

The affair failed to disrupt further progress in the Israel-PLO track of the peace process. On 29 August, the two sides signed an agreement extending Palestinian rule to education, health, tourism, social welfare and tax. The deal was initialled in Cairo on 25 August.

Following the agreement, PLO chief peace negotiator with Israel said that he ruled out any gradual handover of West Bank towns. 'I don't think we will go city by city any more,' he said in Hebron. 'Gaza and Jericho was must a symbol of the start of the (Palestinian) authority and the withdrawal of the (Israeli) army.'