HIGHLIGHTS: Supporters Throng Arafat as He Emerges From Compound++Sharon Won't Gurantee Arafat's Return Should He Travel Abroad++Arafat Condemns Siege At Church of Nativity++STORY: A defiant Yasser Arafat emerged from his shattered headquarters Thursday for the first time since the end of a month-long Israeli siege, flashing a V-for-victory sign to cheering supporters. The Palestinian president, freed from virtual house arrest under a U.S.-brokered deal, stepped out of his offices into a convoy of cars and began a tour of the battle-scarred West Bank city of Ramallah. "With our blood and our souls, we will redeem you, Abu Ammar," hundreds of Palestinians chanted, using Arafat's nom de guerre, as they thronged around him hours after Israeli forces completed their withdrawal from the presidential compound. (Read photo caption).

But jubilation over Arafat's release was tempered by Palestinian anger over U.N. Secretary-General Kofi Annan's decision to call off a probe into Israel's assault on the Jenin refugee camp after the Israeli cabinet blocked the mission.

The lifting of Arafat's confinement ended one of the most bitter episodes in 19 months of Israeli-Palestinian conflict.

Arafat's defiant appearance underlined how the siege ordered by Israeli Prime Minister Ariel Sharon failed to isolate the Palestinian leader, whose popularity among his people has grown along with international sympathy for him.

Sharon has waged a military offensive in the West Bank since March 29, following Palestinian suicide attacks, in which Israeli forces have crippled the Palestinian Authority, undermining Arafat's ability to govern.

After ending the siege, Sharon said he could not guarantee Arafat would be allowed to return if he traveled abroad, as he had done frequently until Israel restricted his movements.

"We're not asked to give any guarantees, we're not going to give any guarantees, because usually in the past when he left, it was always a sign for a wave of terror," Sharon said in an interview with the U.S. television network ABC.

But Palestinian Information Minister Yasser Abed Rabbo told Reuters: "We believe that President Arafat will leave and can leave and will return and can return. This is international will and there is an international guarantee."

TENSIONS REMAIN HIGH

In a sign that tensions remained high, fighting broke out overnight between Israeli troops and Palestinian gunmen in a standoff at the Church of the Nativity in Bethlehem and the army briefly raided the West Bank town of Tulkarm and made arrests.

But the end of the siege of Arafat in Ramallah met a key demand of world leaders seeking an end to a month-old Israeli offensive and smoothed the way for a visit planned by Sharon to Washington next week to meet President Bush.

When he emerged for the first time on Thursday morning, he smiled broadly and flashed the 'V' sign to his supporters from the steps of his compound.

He then visited a makeshift memorial to Palestinians killed in their uprising against Israeli occupation. He held his palms up in prayer, before moving on to Ramallah's main hospital.

Asked how he felt as he toured the Palestinian Education Ministry, Arafat pointed to a group of children and said: "This is how I feel ... One of these children will wave the flag over a Palestinian state."

Arafat had hardly left the compound since early December, when he was initially trapped there by Israeli forces. The siege was tightened on March 29, when Israel offensive began.

The deal to end the Ramallah siege followed an initiative by Bush. Israel has also pulled troops out of cities it reoccupied in its West Bank offensive following repeated U.S. appeals.

ARAFAT CONDEMNS BETHLEHEM SIEGE

While still in his headquarters, Arafat condemned Israel's stranglehold on the West Bank town of Bethlehem, where Israeli flares lit up the Church of the Nativity during the night.

A fire broke out at the church, where gunmen are holed up and surrounded by Israeli troops, but was quickly put out.
"It is not important what happened to me here. What is important is what is happening in the Church of the Nativity. This is a crime," Arafat, trembling with fury, told reporters in his offices in the badly damaged compound.

Under the deal to end the siege, Palestinian, U.S. and British officials escorted six men into armored vehicles which took them out of Arafat's compound to detention in Jericho, which will be supervised by a U.S. and British team.

Israel originally demanded that the six, four of whom were convicted by the Palestinians for the assassination of an Israeli minister, be handed over for trial in Israel.

Israeli Foreign Ministry official Mark Sofer said: "We hope that he'll use this opportunity to fight against the terror."

PHOTO CAPTION

Palestinian leader Yasser Arafat flashes a victory sign to cheering supporters in Ramallah, May 2, 2002. A defiant Arafat emerged from his shattered headquarters for the first time since the end of a month-long Israeli siege. (Osama Silwadi/Reuters)