HIGHLIGHTS: Arafat Dissolves Cabinet & Calls for January Elections to Avoid Humiliating ||Two Houses Demolished in al-Mughazi Refugee Camp|| No Reports of Injuries in Gaza Clashes But 11 Palestinians & 2 Israeli Occupation Soldiers Were Wounded in Confrontations in the Northern West Bank||Palestinian Dies of Wounds in Ramallah & Two Collaborators Shot Dead By Resistance Men Elsewhere||Fatah Split over Leaked Document Calling for End of Resistance Attacks against Israelis Inside Israel|| STORY: Palestinian leader Yasser Arafat was scrambling Thursday to retain his authority after being forced to dissolve his cabinet and call elections for January, measures taken to avoid a humiliating no-confidence vote.

The cabinet resigned Wednesday in the face of almost certain defeat from members of the Palestine Legislative Council who deemed Arafat's cabinet reshuffle in June insufficient to cleanse a corrupt administration.

Presidential secretary Ahmed Abdel Rahman said Arafat had accepted the decision.

Speaker Ahmed Qorei closed the session, saying parliament would reconvene in two weeks to consider a new cabinet line-up to be presented by Arafat.

Arafat had scrambled to avoid the blow to his authority, already under attack from Israel and the United States. He is now being assailed by his own lawmakers, who want more fundamental change in the administration, widely accused of incompetence as well as corruption.

MILITARY PRESSURE FROM ISRAEL CONTINUES

As Arafat fended off dissent in the West Bank, the military pressure from Israel continued early Thursday in the Gaza Strip.

Clashes erupted in Gaza between occupation troops and Palestinian Resistance men after Israeli tanks rolled into the eastern side of Gaza City.

According to Palestinian sources, the shooting occurred as the tanks moved more than 600 meters (yards) into the Ishi Jayia and al-Muntara districts, which lie in the city's eastern half.

There were no reports of injuries in the clashes.

Four tanks and an Israeli bulldozer also staged a brief incursion into the al-Mughazi refugee camp, south of the city, where they demolished two houses.

After destroying the houses the occupation troops pulled out.

Local residents said one of the houses belonged to a member of the the Hamas Resistance group, but Palestinian security sources could not confirm the information. It was not clear who the second house belonged to.

Eleven Palestinians were injured in the northern West Bank in other scattered incidents, including five children reportedly beaten up by Jewish settlers, Palestinian medics aid.

As the crackdown continued, Israeli Defense Minister Binyamin Ben Eliezer said military means alone will not bring to heel the Palestinian uprising and that his government should take steps to find a political solution to the conflict.

"It is not enough to tell the Palestinians how much they are losing through terror, we also have to give them a political horizon," said Ben Eliezer.

PALESTINIAN DIES OF WOUNDS IN RAMALLAH

Meanwhile a Palestinian injured during an Israeli occupation army operation in the West Bank town of Ramallah died of his wounds Wednesday, Palestinian security sources and hospital officials said.

The man, who was not named, was one of two men who were injured during clashes with the Israeli army of occupation Tuesday in Ramallah's western district of Beitunia , which left another man dead.

Both of the injured men were arrested before being taken by the occupation army to a hospital in Jerusalem.

The condition of the second man was not clear.

TWO PALESTINIAN COLLABORATORS SHOT DEAD

Two other Palestinians, suspected of being Israeli collaborators, were shot dead Wednesday by masked Resistance men from the radical Al-Aqsa Martyrs Brigades in two separate incidents, Palestinian witnesses said in the northern West Bank.

FATAH SPLIT OVER DOCUMENT

Arafat's Fatah movement, the main faction in the Palestine Liberation Organisation (PLO), was also split over the leaking of a document drafted by Fatah officials and the European Union which said that the group would prevent attacks on civilians inside Israel.

A Western diplomat said the partial ceasefire, which would not end attacks on Israeli occupation soldiers and settlers in the occupied territories, would mark the second anniversary of the start of the Palestinian uprising in late September.

EU foreign policy chief Javier Solana welcomed the reports of the pledge to end attacks on Israeli civilians.

But Hussein Sheikh, a West Bank Fatah leader, said the document had been leaked early, a move the Western diplomat said had been aimed at undermining it.

The diplomat told AFP: "This text corresponds to what the majority of Fatah members think, including the Al-Aqsa Martyrs, but it's true that it has been released too early."

But in Jenin, a statement by the Al-Aqsa Martyrs Brigades, an armed Fatah offshoot responsible for the deaths of many Israelis, slammed all talk of an end to attacks inside Israel.

PHOTO CAPTION

An Israeli soldier takes position during clashes in the West Bank city of Nablus, August 26, 2002. Israeli troops swept into the Jenin refugee camp on Monday and hunted house-by-house for Palestinian militants, witnesses said. Palestinian officials said Israel had effectively frozen the Gaza-Bethlehem deal after talks on a Hebron pullout floundered over the weekend. REUTERS/Abed Omar Qusini
- Aug 26 10:29 AM