RAMALLAH - United States Secretary of State Colin Powell's peace mission looked doomed as he began a final meeting with Yasser Arafat last night with no sign of a truce or a full Israeli pullout from scarred Palestinian cities.
Powell began his second meeting with the Palestinian President in his besieged Ramallah compound soon after Israeli tanks and troops rolled into the West Bank village of Bal'a.
He arrived in Jerusalem last week to reinforce President George W. Bush's demands for an immediate Israeli pullout from West Bank cities, action by Arafat to halt Palestinian violence and agreement from both sides to revive peace talks.
"The situation is very, very grave," Palestinian negotiator Saeb Erekat said just before Powell and Arafat began their talks.
"If the situation is left the way it is now ... I would say God help Palestinians and Israelis."
In the latest incursion, witnesses said, tanks fired shells at the Palestinian National Security headquarters in Bal'a and troops began house-to-house searches.
But as that was happening Israeli Prime Minister Ariel Sharon eased objections to Arafat taking part in peace talks.
Sharon has been touting the idea of a Middle East peace conference with Egypt, Jordan, Saudi Arabia and Morocco.
Palestinians have been generally cool to the idea and the Arab states have yet to respond.
In other developments yesterday:
* The Bush Administration said it would let the PLO keep an office in Washington for another six months, but warned it could be expelled and lose access to its money in the US if Arafat does not comply with its demands.
* In Bethlehem, gunfire erupted around the Church of the Nativity, besieged by Israeli soldiers for two weeks. A Palestinian was wounded in his home nearby.
Sharon told Israeli television that officials of the US Central Intelligence Agency were mediating a deal whereby the gunmen in the church wanted by Israel for "terror activities" would surrender and face trial in Israel or be expelled.
* A Palestinian died in the divided West Bank city of Hebron.
Palestinians said troops shot the man in the leg for no reason and that Jewish settlers dragged him away and let him bleed to death.
The Israeli Army said he was shot after he tried to stab a soldier. He died despite efforts by Army medics to save him.
- REUTERS
Feature: Middle East
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Middle East Daily
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Jerusalem Post
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US Department of State - Middle East Peace Process
Powell hopes look lost as Israeli offensive rolls on
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