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Ariel Sharon and Shimon Peres faced conflict on Wednesday, as the prime minister defied ally Washington by ordering fresh military strikes on Palestinian Authority soil, while the foreign minister fostered new plans for peace with the Palestinians and for a face-to-face meeting with Yasser Arafat.

It is widely believed that Sharon may call off his planned trip to Washington next week in part to avoid Bush administration flak over the blockades, seen by U.S. officials as a thorn in the side of the war effort.

Keen to assuage pan-Muslim qualms over his aerial onslaught in Afghanistan, President George W. Bush has made little secret of his irritation with Sharon over the armor-plated blockades that Israel clamped on key Palestinian towns in response to the assassination of Tourism Minister Rehavam Ze'evi two weeks ago.

While the army pulled out of Bethlehem and Beit Jala earlier this week, on Wednesday it was again on the advance, launching a raid on Arabe, a West Bank village under Palestinian Authority control near Jenin, and a hotbed of Palestinian militancy.

Israeli security officials said the brief incursion netted a militant poised to carry out a suicide bombing inside Israel. Hours later, IDF forces gunned down a Hamas activist in Tul Karm to the south. In Hebron, missile-firing helicopter gunships roared over the city, assassinating a Hamas military commander reportedly responsible for many of the deadiest Palestinian attacks of recent months.

Sharon has made clear his opposition to Peres's suggestions that he might bump into and exchange words with Arafat when he and the PA Chairman find themselves at the same economic conference in Majorca, Spain at the weekend.

Despite a tide of statements by Sharon aides that there must be no negotiations with Arafat until the PA cracks down on Palestinian militants, Peres hinted before a planned meeting with Sharon Wednesday evening that he and Arafat might meet in any event.

"In general, in diplomacy there is no holding of grudges," Peres told Army Radio. "I am not going to hold negotiations with Arafat. Negotiations require exacting preparations, otherwise there will be disappointment." On the other hand, he continued, "when there is an international conference, people don't walk around back-to-back."

The possible Peres-Arafat meeting has engendered particular interest in Israel because of a new draft peace plan that Peres is beginning to float. The plan, which is also to be discussed at the Wednesday evening Peres-Sharon confab, reportedly includes the establishment of a Palestinian state, a withdrawal from the Gaza Strip, and dismantling of Gaza settlements. It is highly unlikely that Sharon could live with such a blueprint.

It remains to be seen if the two will agree to disagree over the peace plan and the possible Arafat meeting, or if, as some Labor and Likud figures suggest, the dispute could ultimately contribute to the break-up of the Sharon coalition.

According to Ha'aretz commentator Gideon Samet, in the face of the tightening screws from Washington and the generally inconclusive results of the military campaign, Sharon would be well-advised to reverse course and see the present period of conflict as an opportunity to put forward a peace plan of his own.

"A funny thing sometimes happens on the way to the war," Samet writes in Wednesday's paper. "Instead of heating up, it cools down. Instead of leading to the folly waiting at the end of the road, suddenly an alternative route appears."

Samet concludes that the only possible advice that Sharon can be given now is that he should propose "a political initiative of his own, even under a certain degree of fire; that he should spare himself and his country the humiliation of being dragged by the ear to talks with the other side. If he doesn't do it in good measure on his own, it will be forced upon him eventually from the outside, in the most embarassing manner."