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With war drums thundering just over the ridge on Jerusalem's southern horizon, Ariel Sharon convened his security cabinet Wednesday, in what was viewed as an emergency effort to brake - or continue to ride - a juggernaut of Israeli-Palestinian escalation.

The cabinet, meeting in the shadow of the first Arab shelling of Jerusalem Jews since the 1967 Six-Day War, resisted rightist pressure to deliver a roundhouse blow to Yasser Arafat and his Palestinian Authority. But in a step that may foreshadow new cycles of bloodletting, the ministers followed Sharon's lead in reiterating Israel's policy of "intercepting" (targeting and killing or seizing) Palestinians suspected of plotting imminent terror attacks.

Cabinet Secretary Gideon Saar indicated that the prime minister had massed troops and armor outside Palestinian cities in the West Bank as a warning to Palestinian leader Yasser Arafat. "Everything depends on the behavior and the activity of the Palestinian Authority in taking action against terror and the terrorists operating within its terrirory and from its terrority, in order to prevent deterioration.

"At the same time, the IDF must prepare for any eventuality that may develop."

The latest spasm of violence coincided with the late Monday opening ceremonies of the Maccabiah Games, an Olympics-modeled gathering of Jewish athletes from scores of countries. Minutes before the ceremonial opening of the Games, a Palestinian suicide bomber blew himself up near a busy suburban train station north of Tel Aviv, killing himself and two IDF soldiers.

The next day, IDF Apache helicopters roared into the Bethlehem-area Palestinian village of Beit Jala, just south of Jerusalem, rocketing two houses. The raid killed two senior figures of the militant Hamas movement and two other men in an operation that Israel said had been launched to prevent Hamas from staging a major terrorist attack during the closing ceremonies of the Games.

At the end of an overnight assessment session in the Defense Ministry, a senior security official told Israel Radio that "Israel is making do for now with massing infantry forces and tanks in the [West] Bank and will try to refrain as much as possible from a response that could cause further escalation in the territories."

Some hawks have charged that Sharon has betrayed his hard-line past by refraining from lashing out harder at the Palestinians. Saar said the prime minister was acting "according to the national interest... and not according to a desire to satisfy lusts."

But Saar was quick to caution that if the Palestinian Authority failed to mend its ways, "Israel's policies of applying force can also change."

Arab MK Ahmed Tibi, a former advisor to Yasser Arafat, said Wednesday that Israel's massing of troops at the outskirts of the West Bank Palestinian cities of Bethlehem and Jenin proved that the government was under pressure to reinvade and occupy lands ceded to the Palestinian Authority under past peace agreements.

Tibi called the troop deployment "an adventurist measure which reflects government policy, which is pushing for a ground invasion of the lands of the [Palestinian] Authority." Tibi said the pressure for a ground invasion stemmed from the Israel's military echelon.

Current Arafat aide Ahmed Abdel-Rahman said, "These huge numbers of military units, tanks and heavy artillery have only one goal which is to attack the Palestinian National Authority."

Abdel-Rahman said the move was evidence that Israel had abandoned a U.S.-brokered cease-fire. "These reinforcements... are pushing the fragile situation to the edge of explosion," he said.

The cabinet also okayed Wednesday an operational plan described during the meeting as "an element in the struggle against terror." The measures increase security forces activity along the Green Line, Israel's pre-1967-war border with the then-Jordanian held West Bank. The approved steps also provide for beefed-up enforcement of Palestinians illegally "infiltrating" into Israel, as well as Israelis who employ and shelter them.

The refusal of the cabinet to ratchet up the level of fighting clearly irked hawkish ministers. The Wednesday session was marmed by a heated exchange between cabinet ministers Ephraim Sneh of Labor and Shlomo Benizri of the ultra-Orthodox Shas.

"There are ministers who want to do as little as possible in fighting Palestinian violence," Israel Radio quoted Benizri as telling the ministers.

Sneh, a reserve army brigadier general who lauded Sharon for sticking to his policy of relative restraint, retorted that "Ministers want to do that which is effective."

Benizri, who said grass-roots Israelis were demanding to know how much longer the violence would last, then said that there were ministers who wanted to create the impression that cabinet rightists were calling for war. "Who is talking about war at all? We are speaking of a policy of hitting Palestinians, hitting infrastructures, this is only self-defense."

Washington, Israel's patron ally, was reticent to commit itself over the significance of Israel's having massed troops. "The situation is fluid," remarked State Department spokesman Philip Reeker. "We are following developments at the scene."

Pressed for details Reeker offered: "Our efforts, of course, are focused on security cooperation and practical efforts to bring the violence down."

According to Ha'aretz military correspondent Amos Harel, an escalation in which both sides have played a crucial - if unadmitted - role may require a much more intensive level of involvement by Washington, and soon, if the Bush administration is serious about heading off new explosions.

"The pace of events over the last few days has trapped both sides into a situation in which they believe they have to retaliate. The mortars were a Hamas response to the assassination, while Israel cannot ignore a military attack on its capital," Harel writes in Wednesday's paper.

"The real question then becomes whether American mediation will start again after a general conflagration, or whether it might perhaps manage to stir itself to precede it."