Still Stranded

Israel has announced it will lift its blockade of Bethlehem for the continuing Christmas festivities. "The cordon will be removed in order to ease the celebration of the holiday in the city, to facilitate maximum access to the site of worship to Christians from Israel, the Gaza Strip and the West Bank," the Defence Ministry said.

But Yasser Arafat is still banned from the town celebrated as Jesus‘ birthplace.

Despite widespread international criticism, Arafat was not allowed to take part in festivities on Christmas Eve in Bethlehem. He will also be prevented from attending Orthodox Christian celebrations on January 6 unless he arrests the killers of Israeli cabinet minister Rehavam Zeevi, the Israeli Defence Ministry said. Israel says Arafat has not gone far enough to rein in militants behind suicide attacks.

Witnesses say the cordon has only been partly lifted and that Jerusalem was still blocked. And troops will still remain deployed in and around Bethlehem.

Fresh talks

The announcement to lift the ban came after a day of Israeli-Palestinian talks, following 15 months of bloodshed in the West Bank.

Representatives from the European Union and Arab countries gathered at the Palestinian leader's West Bank office, where the diplomats discussed the current political crisis.

The meeting took place only hours after clashes not far from Arafat's residence. Protesters from various European countries, including Britain, France and Italy joined Palestinian demonstrators, calling for an end to the Israeli occupation of Palestinian areas. Israeli soldiers responded with tear gas.

On Thursday, Israeli troops seized eight suspected militants during an incursion into Hebron. The raid was the second in two days. The operation was according to the army designed to "frustrate terror activity".

Months of bloodshed

At least 792 Palestinians and 234 Israelis have been killed since late September 2000, when the Palestinian uprising began after peace talks came to a halt.

Palestinian negotiator Babil Shaath said the fresh talks between Israelis and Paletinians were based on a four-point document in an attempt to chart a political way out of the current conflict, and "not focus on security matters as Sharon always stressed".

Proposals under discussion included establishing a Palestinian state on 42 per cent of the West Bank and most of the Gaza strip, brought forward by Israel’s foreign minister Peres.

But Sharon insisted on Thursday that the document "has no effect or weight", and that he would not authorise talks on a Palestinian state before the subject was brought to Israel’s government.

"When the day comes for peace talks, I will run them," he said.