Sharon hints at halting assassinations as Egypt urges Hamas to call ceasefire

Israel said yesterday that it was considering gradually withdrawing troops from the West Bank city of Bethlehem and allowing Palestinian security forces to resume control, as President George Bush insisted that a Middle East peace was still possible despite the welter of violence since his landmark summit in Aqaba.

Fresh talks were under way in the Gaza Strip with Egyptian mediators trying to persuade the Palestinian militant group Hamas - which vowed last week to bomb Israel to "rubble" - to agree to a temporary ceasefire.

Sources close to the talks said they were optimistic Hamas would agree to a ceasefire. The Palestinian Prime Minister, Abu Mazen, is expected to join the talks today.

The Israeli Prime Minister, Ariel Sharon, appeared to back off from an Israeli threat to "wage war to the bitter end" against Hamas. He was quoted as saying: "If no one fires on us, we will not return fire, except in cases of ticking bombs," a remark that was interpreted as meaning Mr Sharon would call off the helicopters that have assassinated Hamas leaders almost daily in the Gaza Strip, though he refused to give an explicit guarantee.

Sixty-three people have been killed on both sides since the summit in Jordan, where Mr Sharon and Abu Mazen committed themselves to the United States-backed "road-map" peace plan, which calls for an independent Palestinian state by 2005.

The road-map agreement is in serious trouble after a round of violence between Israel and Hamas, which was triggered when Israel attempted to assassinate one of the leaders of the militant group's political wing last week.

Mr Bush said yesterday: "I believe peace is possible" but conceded: "I believe we've got a lot of work to do." On Hamas, he said: "The free world and those who love freedom and peace must deal harshly with Hamas and the killers ... Until these people are brought to justice, those who will kill innocent people in order to deny the establishment of a Palestinian state, there will be violence."

There was no mention of the innocent bystanders, including women and children, who were killed in the Israeli assassination attempts. A seven-year-old girl who was wounded in the botched assassination of the Hamas leader Abdel-Aziz Rantisi died yesterday.

"We would like the Palestinian Authority to set up a security force ... That will do the job" of dealing with Hamas, President Bush said.

The PA has volunteered to take over security in areas of the occupied territories if the Israeli army withdraws, and the Israeli Defence Minister, Shaul Mofaz, told the Israeli cabinet yesterday that talks were under way on a possible withdrawal from Bethlehem.

Israel has already said it is willing to withdraw troops from the northern Gaza. Mohammed Dahlan, the Palestinian security chief, also wants Israeli troops out of Ramallah, the PA's administrative centre, but that is not on offer.

Israel has made numerous withdrawals from West Bank cities including Bethlehem since it reoccupied them last summer, placing their populations under curfew, but the army has always returned after the first militant attack. Under the new talks, Israeli soldiers will pull out of the northern Gaza towns of Beit Lahiya and Beit Hanoun first. Despite the talks, Israeli soldiers went into Beit Hanoun yesterday, killing a Palestinian militant.

Meanwhile, Peace Now, an Israeli peace movement, said Jewish settlers had set up five new settler outposts in the West Bank since the Israeli army began dismantling outposts last week. Mr Sharon pledged at Aqaba to remove outposts not authorised by the Israeli government. All the settlements are illegal under international law.