Arafat says he is under 'complete siege'

This undated aerial photo of Arafat's compound in the West Bank town of Ramallah has Arafat's office building encircled in red.

RAMALLAH, West Bank (CNN) -- Palestinian Authority President Yasser Arafat remained trapped in his office early Saturday where he told CNN by phone that he was under "complete siege."

"They have destroyed completely seven of our buildings. Completely around my office and firing (at) my office with all their armaments," Arafat said as Israeli tanks were parked outside his office.

CNN correspondent Michael Holmes reported hearing fierce exchanges of fire overnight in Ramallah, with an occasional tank shell exploding.

Israeli troops took over most of Arafat's Ramallah compound on Friday, fighting room-to-room and arresting as many as 70 people, Israel Defense Forces said.

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Palestinians battled the Israelis with automatic weapons, at times in the same rooms. At least five Palestinians and one Israeli officer were killed.

Israeli Prime Minister Ariel Sharon said it was the beginning of an operation against Palestinian militants that is to last weeks.

Since the beginning of the Passover holiday on Wednesday night, Palestinian groups have carried out three terror attacks against Israelis that resulted in 28 Israeli deaths and more than 100 injuries.

When Arafat was asked if he would rein in the violence as requested by the United States, Arafat angrily said the Palestinians were currently suffering from "the terrorist activities of the Israeli occupation."

He also scoffed at the U.S. announcement that the Israelis had promised he would not be harmed. Arafat said the focus should be on "the problem of our people, of our liberty, of our independent Palestinian state."

The Palestinians disputed the number of arrests, but said one Arafat aide had been arrested at a home outside the compound.

Several Israeli tanks and armored personnel carriers have been deployed to the compound. Troops could be seen entering through at least seven holes punched in the walls. The compound's gates also had been destroyed and heavy gunfire could be heard from inside the facility, which covers several acres.

Arafat was holed up in an office on the second floor of the building with two aides; two tanks were stationed at the bottom of the stairs, one of the aides said. Electricity and phone lines had been cut, but Palestinians have access to cellular phones, said Arafat aide Yasser Abbed Rabbo.(More details from Ramallah)

Also on Friday, Al Aqsa Martyrs Brigades -- the military wing of Arafat's Fatah movement -- claimed responsibility for a blast that killed at least two Israelis in Jerusalem.

Israeli troops enter Arafat's Ramallah headquarters on Friday after tanks broke through the wall.

Latest developments:

The raid marked Israel's response to a series of Palestinian terror attacks that occurred even as international efforts to lay the groundwork for a cease-fire intensified.

U.S. envoy Zinni has spent the past two weeks in the region pushing for the implementation of a plan to break the cycle of attack and reprisal, and, on Thursday, the Arab League adopted a Saudi-proposed blueprint for peace. Within 24 hours, the suicide bomb went off at the market in Jerusalem.

It also represented yet another downward lurch in Israeli-Palestinian relations, which have steadily deteriorated since the assassination of Israeli Tourism Minister Rehavam Zeevi last October.

As terror attacks continued unabated despite repeated calls by Arafat for an end to the violence, the Sharon government moved from regarding the Palestinian Authority leader as a potential partner for peace to calling him "irrelevant" and refusing to deal with him. The nadir came Friday, when Sharon described Arafat as an enemy who "established a coalition of terror against Israel" and would therefore be "isolated."