HIGHLIGHTS: Palestinians View Settlements Illegally Built on Palestinian Territory as Legitimate Targets||Head of FATAH Movement in Nablus Arrested||El-Baz & Tenet Join Burns in Stepped up Mideast Diplomacy||STORY: A Palestinian Resistance man succeeded in penetrating Israeli defenses around the internationally illegal settlement of in Shavei Shomron North of Nablus where started shooting and throwing grenades indiscriminately causing a lot damage to property before he was shot down dead by on of the settlers. (Read photo caption)

Israeli occupation soldiers defending the illegal settlement are meanwhile reported to be combing the area in search of another Resistance man who also succeeded in penetrating their defenses. It was not immediately clear whether the two infiltrators came in together or separately.

PALESTINIAN ATTACKS ON SETTLEMENTS SPARK INFIGHTING WITHIN ISRAELI CABINET

Israel's army chief sparked bitter debate at a security cabinet meeting on Wednesday with a renewed proposal to exile Palestinian leader Yasser Arafat after a Palestinian Resistance man killed three youths in a Jewish settlement.

Prime Minister Ariel Sharon, upbraided Lieutenant-General Shaul Mofaz for overstepping his bounds, political sources said.
But the dispute in the cabinet room, where ministers also debated whether to reoccupy Palestinian-ruled areas, was a sign of pressure on Sharon to retaliate for the latest attacks.

RESISTANCE LEADERS ARRESTED

The Israeli occupation army has meanwhile, confirmed the raid into Palestinian-controlled Nablus but gave no details other than to say the raid was aimed at arresting those accused of being involved in what is described as terrorist activities.
Among those arrested was Issam Abu Baker, head of Palestinian Authority President Yasser Arafat's Fatah movement in Nablus, Israel radio reported. His family later confirmed the arrest.

The occupation army also moved into the West Bank city of Qalqilya overnight.

STEPPED UP DIPLOMACY

Osama el-Baz, an envoy sent by Egyptian President Hosni Mubarak, met Israeli Prime Minister Ariel Sharon ahead of planned talks in the United States next week between Egyptian President Hosni Mubarak and President George W Bush.
Egypt's MENA news agency said Sharon and Baz discussed "the deteriorating situation in the region and means of returning to the negotiating table with the goal of ending the occupation and establishing a Palestinian state."

William Burns, U.S. assistant secretary of state for Near Eastern affairs, also held talks with Sharon, a day after meeting Palestinian President Yasser Arafat in the West Bank.

CIA Director George Tenet is scheduled to depart Friday for the Middle East for consultations with Israeli and Palestinian security officials to discuss the prospects for renewed security cooperation between the two sides, officials said.

Tenet proposed a cease-fire and security plan in June 2001 that urged Israeli and Palestinian security organizations to reaffirm commitments to agreements under the April 2001 Mitchell report.

PHOTO CAPTION

An Israeli army bulldozer crew closes a road into the Palestinian village of Beit Furik, near the West Bank city of Nablus, Wednesday, May 29, 2002. The village was closed off in the wake of an overnight attack on a neighboring Israeli settlement of Itamar, leaving three teenage Israeli students, and one Palestinian attacker, dead. (AP Photo/Nasser Ishtaya)
- May 29 9:49 AM ET