JERUSALEM - Israel's air strike on Gaza, which killed 15 Palestinians, may have wrecked an imminent commitment by Palestinian militants to end suicide bombings against Israeli civilians.
Javier Solana, the European Union's foreign policy chief, said an agreement had been within reach.
An EU and United States team was finalising the terms of an Israeli-Palestinian ceasefire when the missile attack happened, diplomatic sources confirmed.
They stopped short of pronouncing the agreement dead, saying talks could continue. But they indicated the attack, in which the commander of the Hamas group and 14 civilians were killed, had in effect scuppered the Palestinian-proposed deal.
The Israeli newspaper Yedioth Ahronoth reported that just 90 minutes before an Israeli bomb ploughed into a packed Gaza neighbourhood, leading Palestinians linked to Yasser Arafat's Fatah movement had agreed to publish a call for a unilateral end to all attacks on civilians inside Israel.
The newspaper printed what it said was the text of a planned declaration.
It reads: "From this moment on we will cease all attacks on innocent men, women and children who are non-combatants. We call on all the political organisations and Palestinian movements to cease these attacks immediately, without hesitation or conditions."
Leading figures inside Fatah and its Tanzim militia were understood to have agreed to the unilateral declaration. Fatah is believed to be linked to the militant al Aqsa Martyrs Brigades, believed to have carried out several suicide bombings and other attacks.
The militant Islamist Hamas also agreed to honour the call, reports said. Hours before the air strike, Hamas' spiritual leader, Sheikh Ahmad Yassin, said the group would consider ending suicide attacks if the Israeli Army withdrew from West Bank towns it had reoccupied.
The target of the air strike was the head of Hamas' military wing, Sheikh Salah Shehada, who died in the bombing.
Hamas said all prospects of an end to attacks were off.
Israel Prime Minister Ariel Sharon is facing his heaviest criticism for months at home and overseas for authorising the attack.
Quoting a presidential aide, the New York Times said President George W. Bush was "visibly angry" when he heard of the strike.
The criticism of Sharon increased when it emerged that the Israeli Air Force had used a one-tonne bomb. Previous assassination attempts have used guided missiles, which are more accurate and cause less destruction.
The Air Force decided to use a bomb because previous missile strikes failed to hit their targets.
Israeli authorities dismissed the reports of an imminent ceasefire as a Palestinian-engineered propaganda ploy and said the missile attack was aimed at killing only an "arch-terrorist" after intelligence indicated no civilians were nearby.
It was clear that the Israeli Government was unprepared for the deluge of condemnation from around the world. Sharon told Yedioth Ahronoth that if he had known the attack would cause such heavy civilian casualties, he would not have authorised it.
Foreign Minister Shimon Peres promised a full inquiry, telling the BBC: "What happened is really regrettable. It wasn't done intentionally. I think all of us feel sorry for the loss of life of innocent people, particularly children."
An editorial in the Ma'ariv newspaper said: "Considering the location of the house and the time of the operation, it should have been clear to the decision-makers that children would be among the casualties.
"Ariel Sharon was, in fact, the only politician who was familiar with the details of the operation and authorised it. He is, therefore, responsible, and even if he says over and over that it was a great success, he is wrong and misleading."
Some Israeli commentators saw political calculation in the timing, to scupper efforts to reform Palestinian institutions that could solidify dialogue and press Israel into negotiating peace with the Palestinians.
"A question is whether it was right to kill Shehada in the midst of concerted efforts by Saudi Arabia and other countries to persuade Hamas to stop terror attacks," commentator Nahum Barnea wrote in Yedioth Ahronoth.
Ma'ariv said: "The Air Force strike in Gaza seems as though it was decided on by someone in the political echelon not interested in a ceasefire. This is probably not so, but it certainly appears so, and it is clear what damage this causes to Israel and its Government."
Uri Dromi, an analyst at the Jerusalem-based Israel Democracy Institute, said: "Shehada deserved to die. But the mistake was either in the intelligence-gathering about the civilian presence or in the use of heavy ordinance."
Arieh O'Sullivan, military correspondent for the Jerusalem Post, wrote: "Top generals said that, had they known innocent people would likely be hurt, they would never have approved the strike. Come on! Really?"
He suggested Israel was trying new tactics in its fight against suicide bomber networks in the 22-month-old uprising against Israeli occupation.
"Perhaps the Air Force was ordered to deliberately target the family of the Hamas leader as a warning to others," he said.
Yesterday, Israel was roundly criticised in the United Nations Security Council with nation after nation saying the attack was unreasonable, unacceptable and unwarranted.
Arab ambassadors want the 15-member council to adopt a resolution demanding the "withdrawal of the Israeli occupying forces from Palestinian cities".
US officials said Washington would oppose the draft if put to a vote. But Western diplomats said revisions of the document might yet result in adoption.
Peres wants to pursue talks with Palestinian moderates aimed at easing the hardships of 700,000 Palestinians in West Bank cities reoccupied by the Israeli Army after Palestinian suicide bombings in Israel.
But Sharon refuses contact with Palestinian President Yasser Arafat, calling him a backer of terror against Israelis, and wants him ousted.
He has said that Peres' meetings must not be seen as peace talks.
- INDEPENDENT, REUTERS
Feature: Middle East
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Israeli air strike 'scuppered deal with militants'
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