Palestinians reject Israeli ultimatum

Zeevi was shot at a hotel in Jerusalem

JERUSALEM (CNN) -- As Israel prepares for the state funeral of right-wing minister Rechavam Zeevi, Palestinians have rejected an ultimatum from Israel to hand over his killers.

Israeli tanks rolled into two areas of the West Bank Thursday, triggering a number of clashes and claiming two lives, including a 10-year-old girl, Palestinian sources said.

The Israeli government early Thursday issued a decree calling on the Palestinian Authority to immediately hand over the "murderers and their senders" responsible for the assassination.

"If the Palestinian Authority does not comply with this demand, Israel will see the Palestinian Authority as an entity that supports terror," said Cabinet Secretary Gideon Saar after a late-night Cabinet meeting.

Saar also said Israeli "self-defense actions will continue."

VIDEO What now for the peace process? Jerrold Kessel reports (October 17) Play video (QuickTime, Real or Windows Media) PFLP's Rabah Mihanna says the group is responsible for Zeevi's killing (October 17) Play video (QuickTime, Real or Windows Media)   MORE STORIES Analysis: Arafat's Rubicon    EXTRA INFORMATION • Profile: Rechavam Zeevi  • In-Depth: Struggle for peace  • Mustafa Zibri and the PFLP    AUDIO Jerrold Kessel: "Firm demands made of Arafat" 935 KB / 1 min 27 secs WAV sound

Zeevi, Israel's ultra-nationalist tourist minister, was shot in the head and neck in a Jerusalem hotel Wednesday.

In an interview on Israeli television, Palestinian Cabinet member Ziyad Abu Zayad rejected the Israeli ultimatum that the Palestinian Authority either hand over the killers or be considered a supporter of terrorism.

But Abu Zayad said if Zeevi's killers were in Palestinian Authority territory, Palestinian leader Yasser Arafat needed to arrest them and bring them to trial, "but not to extradite them to Israel."

Abu Zayad said the bullets that killed Zeevi were also aimed at killing off the cease-fire between the Palestinians and Israel. He said the Palestinian Authority is "interested in the cease-fire and in returning to the negotiations table."

The Jerusalem daily Ha'aretz quoted senior Israeli officials as saying they know who killed Zeevi and who sent the killers. The officials said the names had been turned over to the Palestinian Authority.

Israel Radio quoted Palestinian Authority spokesman Nabil Abu Rdainah as saying the PA had uncovered an Israeli plot to kill Arafat. Israel Radio also reported that an official of the Popular Front for the Liberation of Palestine, the group that claimed responsibility for Zeevi's assassination, would now go after Israeli Prime Minister Ariel Sharon.

The presence of Israeli forces on the outskirts of the Palestinian towns of Jenin and Ramallah prompted firefights with Palestinian gunmen.

The Palestine Red Crescent Society said there were two deaths in the unrest: A 24-year-old Palestinian security officer in Ramallah and a Palestinian schoolgirl on her way to class in Jenin.

Sharon convened his Cabinet after Zeevi's death. The session began at 9 p.m. Wednesday (3 p.m. EDT) and lasted more than three hours.

Thousand of Israelis filed through the Knesset building Thursday to view the body of Zeevi, who will be buried in a state funeral.

CNN has learned security forces for the Palestinian Authority have arrested two members of the PFLP leadership -- Rabah Mihanna, a member of the group's politburo, and Younis Al-Jaru, a member of its central committee. It was not immediately clear if the arrests came before or after the latest Israeli demands.

Earlier, Palestinian Authority President Yasser Arafat ordered his security forces to find and arrest the killers of Zeevi.

Terje Larsen, the U.N. representative in the Middle East, said after talking with Arafat that he expected multiple arrests, possibly within hours. A PFLP spokesman, Ali Jaradat, was questioned and released at one point Wednesday.

In addition to the assassination, the PFLP claimed responsibility for a bombing that the Israeli Army said killed a suicide bomber and lightly wounded two Israeli soldiers on patrol near a kibbutz close to Gaza.

Shortly after the killing, the Israeli government announced it was suspending contact with the Palestinian Authority.

Israeli Foreign Minister Shimon Peres urged Arafat to "take hold" of the situation, warning all the recent movement toward resuming peace talks could be lost if he does not.

The Palestinian Authority issued a statement condemning the killing of the Israeli Cabinet member, and Arafat told Larsen he considers the assassination "extremely damaging to the Palestinian cause."

Larsen said he told Arafat "words are not enough. It has to be followed by deeds."

Larsen said Arafat knows he has to act quickly.

"The test of the authority exercised on the ground by the Palestinian Authority is now, and we will have to judge what is happening on the ground," said Larsen.

Sharon held Arafat responsible for the killing and said it marks a major change in Israeli-Palestinian relations.

Zeevi, 75, and other members of the National Union, a bloc of two small parties, said Monday they were leaving Sharon's government because they were opposed to the easing of tough security restrictions on the movements of Palestinians.

Zeevi was a retired army general who fought in Israel's 1948 war of independence, the 1956 Sinai campaign, and the 1967 Mideast war.