JERUSALEM - Israel last night moved the Middle East crisis back from the brink by extending its ultimatum for an end to the violence.
The Government said it would give international mediators more time to try to end a cycle of Israeli-Palestinian violence and revive the Middle East peace process.
"The Government's inclination in light of several requests from world leaders is to grant a number of additional days in order to exhaust the possibility of ending the violence with the feeling that this is, indeed, the last chance," said a statement issued by Prime Minister Ehud Barak's office.
It made the announcement while the cabinet deliberated in emergency session on what moves to take following the expiration of a 48-hour period Barak had given the Palestinians to stop 12 days of clashes with Israelis forces.
Barak had said Israel would respond to Palestinian violence with "all means" and consider peacemaking over if his two-day deadline, which expired after the Yom Kippur holiday yesterday, was not met.
United States President Bill Clinton yesterday held off a decision on whether to convene an emergency summit to quell violence that has claimed the lives of at least 89 people, mostly Palestinians and Israeli Arabs.
US officials said Washington had failed to get the necessary assurances that a visit to the region by Clinton or Secretary of State Madeleine Albright to meet Israeli and Palestinian leaders would yield a deal to stop the bloodshed.
United Nations Secretary-General Kofi Annan held crisis talks in Israel and then with Palestinian President Yasser Arafat to try to avert an escalation in the crisis.
Israeli soldiers and Palestinians clashed yesterday in several towns across the West Bank, including Hebron - where helicopter gunships went into action - and in Ramallah and Nablus. At least 14 people were hurt, witnesses said.
Each side accused the other of firing live rounds.
Israel's acting Foreign Minister, Shlomo Ben-Ami, said the violence showed the Palestinians had not met Barak's ultimatum.
Stepping up the pressure on the Palestinians, the Israeli Army announced that the closure it imposed on the West Bank and Gaza Strip before the holiday would continue, a move Palestinian officials had predicted.
Annan was due to meet Barak today in an attempt to stop the fighting and restart negotiations.
"Time is short and the stakes are high and the price of failure is more than any of us wants to pay," Annan said after meeting Arafat in Gaza.
Arafat said he and Annan "looked at the entire situation" and would meet again today. "We had an important call from President Clinton," Arafat said, without elaborating.
The current round of fighting erupted after Israeli right-winger Ariel Sharon visited a bitterly contested Jerusalem shrine on September 28 that is holy to Muslims and Jews. Palestinians say Israel is to blame for the bloodshed and demand an international inquiry.
Yesterday, violence raged in the Israeli Arab town of Umm el-Fahm and in Nazareth, where two Israeli Arabs were killed in clashes with Israeli Jewish crowds during Yom Kippur.
Several Arab-owned homes were torched in Tel Aviv and hundreds of anti-Arab protesters took to the streets in nearby Jaffa and Bat Yam as Israel's national mood darkened.
On the Israel-Lebanon frontier, Israeli and Lebanese soldiers were on alert after pro-Iranian Hizbollah guerrillas seized three Israeli soldiers in a cross-border raid at the weekend.
Diplomatic efforts are underway to resolve the soldiers' fate. Hizbollah wants to exchange them for scores of Lebanese and Arab prisoners in Israeli detention.
Russian and UN envoys held crisis talks with Syria and Lebanon aimed at trading the soldiers.
Meanwhile, Israel claimed that Palestinians injured in clashes with Israeli troops have received $US300 ($751) each from the Palestinian Authority and families of those killed have been paid $US2000.
Israel accuses Arafat of using money to lure more rioters into the streets. The authority scoffs at the suggestion, saying that like any other Government, including that of Israel, it is simply trying to ease the suffering of those injured or killed defending their homeland.
The argument is part of the overall debate over whether the riots are a spontaneous outburst of Palestinian anger or are orchestrated to some degree by Arafat to extract concessions from Israel in the negotiations.
With each funeral, tensions have been rising, leading to new clashes.
Colonel Noam Tibon, the Israeli Army commander of the West Bank's Hebron region, said the authority has been using money incentives to "to warm up the clashes."
"To pay [someone] money to become a 'shaheed,' this is a very dangerous attitude," said Tibon, using the Arabic word for martyr, the term commonly used by Palestinians for those killed by Israeli fire.
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