HIGHLIGHTS: Resistance Men Waiting on the Periphery of Gaza City for any Further Israeli Advance||Yahya Pledges Proper Policing in Areas with Restored Self-Rule||Despite Grave Doubts, Ben-Eliezer Pleased with Progress in Implementation of so-called 'Gaza-Bethlehem First' Security Plan||Israel Detains PFLP & Hamas Leaders in Ramallah, Nablus & Hebron, Al-Khalil||Israel to Allow Palestinian Parliament to Convene to Discuss Reforms|| STORY: Israeli occupation army and naval forces pushed up the Gaza Strip coast early on Wednesday, threatening Gaza City and further dampening prospects for a stalled security plan with the Palestinians

Palestinian witnesses said 11 tanks and armored personnel carriers swept into the coastal village of Sheikh Iljeen, just south of Gaza City, for the first time during a 23-month-old Palestinian uprising for independence.

Palestinian witnesses said Resistance men were waiting on the periphery of Gaza City for any further Israeli advance. There was no immediate report of casualties.

Illuminated by flares, helicopters and boats fired at targets in the surf. The village itself was pitched into darkness by a power failure as the predawn Israeli operation progressed.

The action came a day after the Israeli occupation army said it would relax restrictions on some Palestinians entering Israel from Bethlehem after "relative quiet" took hold in the West Bank city under the so-called "Gaza-Bethlehem First" plan.

Under the plan, signed last week, Israel entrusted the Palestinians with reining in Resistance activists in these areas, as a so-called test case for a wider truce.

Israel ended military operations in Bethlehem a week ago, keeping occupation troops on the outskirts while Palestinian police were deployed in the city to ensure calm. Israel has failed to do the same, as agreed, in the Gaza Strip.

YAHYA PROMISES PROPER POLICING IN AREAS WITH RESTORED SELF-RULE

The Gaza incursion came hours before Israeli Defense Minister Binyamin Ben-Eliezer was to meet with Palestinian Interior Minister Razzak al-Yahya, Israeli security sources said, in the latest contacts on security handovers.

Speaking to Palestinian security officers in Bethlehem on Tuesday, Yahya pledged proper policing of areas with restored self-rule.

"We will maintain security in any city after the Israelis leave and we will implement the law. Nobody is above the law," he said, adding that he hoped Gaza and the West Bank city of Hebron would be next in line to come under the deal.

The United States said it hoped more progress would be made.

Ben-Eliezer, who broached the idea of test areas for Palestinian self-rule during a meeting with Egyptian President Hosni Mubarak in July, was said to be pleased with Gaza-Bethlehem First plan.

"The defense minister briefed the Egyptian president," said a statement from Ben-Eliezer's office on Tuesday, "and said that there is progress in the initiative, despite the difficulties."

Palestinian Information Minister Yasser Abed Rabbo said Israel should withdraw from all areas its army occupied in June.

"Israel's withdrawal from one or two areas does not mean accepting the occupation of other areas," he told reporters after a cabinet meeting in the West Bank city of Ramallah.

ISRAEL ARRESTS PFLP CHIEFS

Israel has meanwhile nabbed two Palestinian political leaders, pressing ahead with its policy of arrests in the West.

The occupation army captured three members of the Popular Front for the Liberation of Palestine (PFLP) in the West Bank city of Ramallah, two of them senior political leaders.

"It is no coincidence that this happened on the anniversary of the assassination of Abu Ali Mustapha," senior PFLP official Kaid al-Ghul told AFP, in reference to the then leader of the secular Resistance movement killed in an Israeli helicopter attack last August 27.

The PFLP retaliated two months later by assassinating Israeli tourism minister Rehavam Zeevi.

Some 200 supporters of the PFLP staged a demonstration in a Bethlehem refugee camp to mark the anniversary of Israel's assassination of their late leader.

Israeli troops combing the West Bank, which they have reoccupied almost entirely since June 19, also netted three members of the Islamic group Hamas Tuesday, as well as another 10 suspected Resistance activists in Ramallah, Nablus and Hebron.

PALESTINIAN PARLIAMENT TO CONVENE

The Israeli government meanwhile said that it would allow the Palestinian parliament to convene a special session to set a date for elections and discuss political reforms.

Another official statement, however, harshly criticized the Palestinian leadership.

The conflicting statements reflected the divisions in Israel's center-right government, and came as the Palestinians discussed new U.S. demands for reforms that would sideline Palestinian leader Yasser Arafat.

The Palestinians have tentatively set parliamentary and presidential elections for January, and the Palestinian Cabinet had said it would ask for the special session.

A session requires Israeli permission because of travel restrictions imposed on the Palestinians during the current uprising against Israeli occupation.

Palestinian general elections were held in January 1996 as part of interim peace accords. At the time, Palestinian residents of east Jerusalem, the sector Israel captured in the 1967 Mideast war and annexed a few weeks later, also participated in the vote.

Israel's government, headed by Prime Minister Ariel Sharon, opposes the participation of east Jerusalem residents in Palestinian elections, arguing that such a step would undermine Israel's claims to sovereignty over all of the city.


PHOTO CAPTION

A masked member of the Popular front for the Liberation of Palestine (PFLP) gestures while marching on the first anniversary of the killing of their leader Abu Ali Moustafa, in the Deheisheh refugee camp near Bethlehem, August 27, 2002. The Israeli army said on Tuesday it would relax restrictions on some Palestinians entering Israel from Bethlehem after "relative quiet" took hold in the West Bank city under a new security plan. REUTERS/Magnus Johansson
- Aug 27 12:41 PM