Ariel Sharon has blamed Yasser Arafat for the attack today by Palestinian gunmen in which four Israeli soldiers were killed.
Two Palestinians were also killed. The Israeli Prime Minister said that his security cabinet would meet in the next few days to review policy towards the Palestinian Authority.
He said that the attack was a continuation of strikes carried out as a result of what he called a terrorist strategy initiated by the Palestinian leader. The attack has been claimed by the militant group, Hamas.
It was the most serious incident since Mr Arafat called for a halt to anti-Israeli violence more than three weeks ago. It looks certain to set back plans for implementing a ceasefire between the two sides.