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Prime Minister Ariel Sharon has turned his hand to roller-coaster policymaking, nonplussing allies and enemies alike by seeming to open the ideological door to an independent Palestinian state while keeping truce talks on ice.

With the Bush administration ratcheting up pressure on Sharon to give his blessing to long-delayed truce talks between Foreign Minister Shimon Peres and Palestinian Authority Chairman Yasser Arafat, Sharon shocked rightist colleagues by declaring in remarks broadcast by Israel Radio Monday:

"The state of Israel wants to give the Palestinians what no one else has heretofore given them - the possibility of establishing a state. Neither the Turks, the English, the Egyptians or the Jordanians gave them such a possibility. All that Israel has asked - and Arafat has also committed himself to this - is to stop the terrorism, to live in peace, to live in calm."

"We are not fighting the Palestinians, we are fighting terrorism," Sharon said, in a conciliatory tone that confounded rightists and leftists alike.

Soon after gunmen killed an Israeli woman early Monday in the Jordan Valley, aides to Sharon said the drive-by ambush had reset the 48-hour clock specified by the prime minister as a pre-condition to any face-to-face truce discussions between Nobel Peace laureates Peres and Arafat. The attack shattered one of the calmest 24-hour periods since the Palestinian uprising erupted nearly a year ago.

Sharon's veto of a planned Sunday Peres-Arafat meeting was widely seen as a knee-jerk response by Sharon to stinging public criticism by his Likud arch-rival Benjamin Netanyahu. Still fuming over the Sunday cancellation, Labor cabinet minister Ephraim Sneh, a former general and ex-Israeli policy chief for the territories, said the meeting should go on Monday anyway, attack or no attack.

"In our view, this meeting is intended to bring about a cease-fire, not to be a result of a cease-fire," Sneh told the radio.

"All in all, there was a quiet 24-hour period prior to the fatal attack this morning. You can't just give every Palestinian with a Kalashnikov (AK-47 assault rifle) veto power over what will be. This is the significance (of Sharon's 48-hour stipulation): Every Palestinian with a Kalashnikov will get up the morning of each planned meeting, and cancel it with the blood of Jews."

Israeli rightists contend that Arafat is only interested in a photo opportunity with his fellow Nobel Peace laureate Peres, in order to achieve an indirect imprimatur as a peacemaker at a time when U.S. officials are sparing no effort to place terrorists and their allies squarely in the crosshairs.

The budding American-led international coalition for a war on terror has put a fresh spotlight on the mooted talks that have kept Foreign Minister Peres and Palestinian Authority Chairman Yasser Arafat on the brink of meeting for months. Turning up the heat, U.S. Secretary of State Colin Powell telephoned Sharon Sunday to press for the discussions, which Powell later said he expected in the "near future".

Sharon, who pleased cabinet hawks with the Sunday cancellation, found himself in more rightist hot water after the overnight comments on Palestinian statehood.

"I oppose the prime minister's declaration, and I don't understand its logic," said Likud minister Tzachi Hanegbi. "It contradicts the view that the prime minister has continually explained to us, that he is unwilling to set out (publicly) the end-results of peace talks before they've even begun, and certainly at a time when it is unclear of the current Palestinian leadership headed by Arafat are even capable of disengaging from the culture of terror, violence and incitement that typify them."

The Sharon statement was believed to have been the strongest indication by a standing Likud prime minister of acceptance of the concept of Palestinian statehood. Labor prime ministers have long stated that a Palestinian state alongside Israel was to be a central component of a future peace.

Sharon was known in the past as the champion of a "Jordan is Palestine" ideology, which held that Palestinians should seek statehood on the last currently occupied by the kingdom of Jordan, east of the Jordan River, and that Israel should have sovereign rule over all of the West Bank and Gaza Strip.

Public Security Minister Uzi Landau, also of the Likud, condemned the Sharon declaration as "a serious error. It's the prime minister's view, but certainly not that of the state of Israel." Landau said "the Likud's position is entirely different, it opposes the creation of a Palestinian state, and I hope that the Prime Minister will know how to retreat from this mistake, in which he has failed."

Settler leaders bitterly attacked the Sharon statement, declaring that "only an insensitive, obtuse leader is capable of offering terrorists a state of their own." Settler activist Shimon Riklin went further, saying the settlement movement should "flood the streets in voicing opposition to what is happening." Riklin said Sharon's statement was a result of U.S. pressure, and a concession to leftist coalition partners.

Rightists said that Sharon should have concentrated instead on directing world attention on what they have called Arafat's role as the Osama Bin Laden of the Arab-Israeli conflict, especially when at a time when there is a broad consensus to fight suspected terror warlord bin Laden.

Ha'aretz commentator Akiva Eldar, however, noted that Sharon has already pulled back from earlier statements likening Arafat to the Saudi-born bin Laden, prime suspect in this month's crippling wave of terror in New York and Washington.

"In the eyes of America's Arab and European friends, the difference between bin Laden and Arafat boils down to the difference between anarchistic and nationalistic terrorism," Eldar writes in Monday's paper. "Those who murdered thousands in the World Trade Center have neither a state nor a statement. On the other hand, the Palestinians' demand for an independent state is just, even in the eyes of a considerable portion of the Israeli Jewish public.

"Unlike bin Laden's brand of terrorism, the goal of which is to strike out at the West, Palestinian terrorism, no matter how cruel its manifestations, is considered by the majority of the inhabitants of the civilized world to be the means for obtaining a legitimate goal. Even though they know that Arafat is riding the tiger if terrorism, they do not buy Israel's argument that Palestinian violence aims at - or is capable of - liquidating the Jewish state."