Sharon 'sorry' Arafat not killed in '82

JERUSALEM (CNN) -- In an interview with the Jerusalem daily newspaper Ma'ariv, Israeli Prime Minister Ariel Sharon said he regretted that Palestinian Authority President Yasser Arafat was not killed when Israel invaded Lebanon in 1982, but said Arafat can still be a partner for peace.

"There was an agreement in Lebanon not to kill Yasser Arafat. Actually, I am sorry that we did not kill him," Sharon said.

But he added, "If Arafat takes all the steps we are demanding that he take, as far as I am concerned, he will again be a partner to negotiation."

Sharon also told the paper that he believed there would ultimately be a "demilitarized" Palestinian state and said he would be willing to give up portions of Israel.

Sharon's comments come as Israeli Foreign Minister Shimon Peres and Palestinian Legislative Council Speaker Abu Ala, who are both attending a World Economic Forum in New York, were scheduled to meet to work on a draft agreement that would lead to a cease-fire and the recognition of a Palestinian state by Israel.

Sharon said there are parts of the draft agreement that are unacceptable to him, but he said, "Ultimately, an independent Palestinian state will be established, which will be demilitarized, and will only have a police force to keep public order. In order to have true peace, I am willing to relinquish portions of Israel." President Bush's Middle East envoy won't be returning to the region without a significant decrease in violence there, Secretary of State Colin Powell said Thursday.

Meanwhile, Arafat has asked Bush to send retired Marine Corps. Gen. Anthony Zinni back to resume negotiations with the two sides, but the White House has refused until Arafat complies with a list of steps to crack down on terrorist activity in Palestinian-controlled territories.

"Gen. Zinni is following the situation closely," Powell said during an appearance with Jordan's King Abdullah II. "When we believe the moment is appropriate and we have got things under a greater degree of control than we are now with regards to violence, we'll consider at that time whether to send Gen. Zinni back."

Powell rejected criticisms that U.S. policy is drifting toward the Israelis, saying the president is committed to a fair solution.

"When the president spoke at the United Nations last fall, he spoke of a vision that he had for the Palestinian people to have a state of their own called Palestine, which would live in peace and security next to a state called Israel," he said, "both respecting each others' rights to exist, both living in security with each other."

A suicide bomber injured two Israeli security officers Wednesday

Violence continued in the region Thursday as Israeli forces shot and killed two Palestinians who detonated an explosive device and opened fire near the Jewish settlements of Gush Katif in southern Gaza, Israel Defense Forces said.

The Izzedine Al-Qassam brigades, the military wing of the Palestinian fundamentalist Hamas organization, claimed responsibility for the attack. Hamas has been labeled by the U.S. State Department as a terrorist organization, and Izzedine Al-Qassam has admitted responsibility in the past for terrorist attacks against Israeli civilians as well as attacks against the Israeli military.

The group identified the two Palestinian men killed in the attack as Mazen Badawi from the Jabaliya refugee camp and Muhammad Abed Rabbo Imad from the Shati refugee camp in Gaza.

In a separate incident, one Israeli was lightly wounded Thursday morning when two mortar shells were fired in the direction of Gush Katif, according to the IDF.

It comes a day after two members of the Israeli security service were lightly wounded in an attack by a suicide bomber in the central town of Taibeh, near the West Bank.

The Al Aqsa Martyrs Brigades, the military wing of Palestinian leader Yasser Arafat's Fatah movement, and Islamic Jihad claimed responsibility for the attack, saying it was a joint operation by both groups.

According to the prime minister's office, Shin Bet -- the Israeli general security service -- was involved in an operation when the suicide bomber blew himself up near a security force vehicle. The incident is under investigation.