Israeli occupation troops on Wednesday demolished three homes of Palestinian resistance suspects in the West Bank, while settler leaders celebrated the establishment of what they termed a new Jewish settlement near the Palestinian city of Nablus. In the West Bank town of Ramallah, Israel maintained its siege of Yasser Arafat headquarters for a seventh day, defying a call by the U.N. Security Council to end operations there and withdraw from Palestinian cities.Israeli Foreign Minister Shimon Peres said Israel would not comply with the resolution because the Palestinians are not meeting the council's demands to halt attacks on Israelis and arrest those responsible.

"We cannot fulfill our part (of the resolution) because the other part will not be fulfilled," he told foreign diplomats.

Peres said Israeli and Palestinian officials resumed negotiations on Wednesday to try to end the standoff at Arafat's compound.

Israel says it will not withdraw from the compound until about 200 people holed up inside surrender. It alleges about 50 of the men, including Palestinian intelligence chief Tawfik Tirawi, have been involved in attacks on Israelis.

Tirawi denied the allegations in an interview with the Israeli daily Maariv and vowed not to surrender. "Yasser Arafat and I will fight to the last minute," Tirawi said.

Also Wednesday, Palestinian security officials said that 18 Palestinians, many of them members of the security forces, have recently been arrested as suspected informers who helped Israel kill wanted militiamen. Eleven of the men were to be put on trial soon, said Maj. Gen. Moussa Arafat, head of military intelligence.

In the southern West Bank, Israeli occupation troops blew up three houses Wednesday, including one belonging to the leader of the Islamic resistance man group Hamas in the town of Hebron, Abdel Khaled Natche, Palestinian witnesses said.

Occupation soldiers gave family members 10 minutes to remove a few belongings before a huge explosion leveled the two-story structure, scattering rubble in all directions.

In another demolition, occupation troops blew up the house of the fugitive leader of the Islamic Jihad group in Hebron, Diab Shweiki, who escaped an Israeli missile attack on his vehicle several months ago.

A third house was leveled in the nearby town of Dura. The three-story building was the family home of brothers Anis and Iyad Amoura, members of the Al Aqsa Martyrs' Brigade, a militia linked to Arafat's Fatah movement.

Israel has demolished more than three dozen homes of Palestinian resistance suspects since mid-July, in an attempt to deter shooting and bombing attacks. Human rights groups say the practice amounts to collective punishment and is ineffective.

Near the Palestinian city of Nablus, Jewish settlers on Wednesday celebrated the establishment of Rehalim, describing it as a new settlement of 14 houses that will be home to 24 families.

Successive Israeli governments, including that of Prime Minister Ariel Sharon , have said they would expand settlements to accommodate natural population growth, but not establish new ones on land claimed by the Palestinians for a future state.

The Defense Ministry, which is responsible for settlement activity, said it was unaware of the establishment of a new settlement.

Rehalim began in 1991 as an outpost established to mark the spot where Palestinian resistance men killed two Israelis. Construction of permanent homes began under former hawkish Prime Minister Benjamin Netanyahu . Palestinians charge that Israeli settlements are illegal encroachment on land they want for a state.

Nati Yisraeli, a settler from Rehalim, said eight families that had been living in caravans at the site moved into the permanent housing in the past few days, and in the coming days the remainder of the 14 homes will be populated.

Yisraeli said in all some 90 people are living in Rehalim.

On Wednesday, right-wing Israeli politicians were supposed to join the settlers in a celebration officially declaring Rehalim a settlement.

Palestinian Cabinet minister Saeb Erekat said the Palestinian Authority would protest Rehalim in letters to the United States and Europe, which have called on Israel to halt settlement activity.

"This is just adding fuel to the fire...settlements to the Palestinians is a grand threat to their existence and to their aspirations," Erekat said. "This is an act that we condemn and we hold the Israelis fully responsible for the consequences."
Israel's Defense Ministry said in a statement that construction for an educational institution in Rehalim was approved four years ago, but that "Rehalim was never defined as a settlement and there is no intention to approve it as such."

The Defense Ministry dismantled 11 illegal outposts on June 30 as part of what it says is a larger plan to get rid of dozens of small caravan communities - some populated and some vacant - that have popped up in the West Bank.

PHOTO CAPTION

Israeli occupation soldiers blow up the house of a activist of the Islamic Jihad resistance men group in the West Bank city of Hebron September 25, 2002. Israel stood defiant on Wednesday in the face of U.S. pressure to comply with a U.N. resolution demanding an end to its siege of Palestinian President Yasser Arafat 's battered West Bank compound. REUTERS/Loay Abu Hayk