Israel says troops are out of Hebron

U.N. may scuttle Jenin probe after Israel balks

An Israeli soldier waves from the top of an armored personnel carrier Tuesday as the army leaves Hebron.

JERUSALEM (CNN) -- The Israel Defense Forces said early Wednesday it had withdrawn from Hebron after arresting more than 150 Palestinians accused of terrorist activity and finding caches of explosives and weapons.

Palestinian sources, however, said some Israeli forces remained in the West Bank city.

Meanwhile, standoffs continued in Bethlehem and Ramallah, although there was some movement in resolving them, and U.N. officials were considering scuttling an investigation into Israel's military operation at the Jenin refugee camp after the Israeli Cabinet decided not to cooperate with the mission.

Israeli troops moved into Hebron late Sunday and early Monday and completed their withdrawal late Tuesday, the IDF said. Of the 150 Palestinians arrested, 52 were on Israel's wanted list, the IDF said.

The operation followed an attack Saturday in which Palestinian gunmen killed four Israelis in the nearby settlement of Adora.

In another development, Palestinian sources said Israeli tanks and troops moved about 100 yards into the Rafah refugee camp in southern Gaza early Wednesday morning and shelled at least one house. Two people were killed, including a Palestinian man and a 2-year-old girl, and four people were injured, the sources said. The IDF had no comment.

On Tuesday, the IDF said border police near the Kfar Darom settlement in Gaza killed two armed Palestinians approaching the settlement. In the West Bank, Israeli troops in tanks and armored vehicles moved briefly into Shawara, a village near Bethlehem, arresting six Palestinians suspected of terrorist activity, the IDF said.

Israeli began its offensive into Palestinian controlled areas last month in an effort to disrupt the "terrorist infrastructure" in the West Bank after a wave of terror attacks against Israelis.

Standoffs continue

Palestinians walk out of the Church of the Nativity in Bethlehem Tuesday.

In Bethlehem, where Israeli forces have surrounded the Church of the Nativity for almost a month, 26 Palestinians walked out and boarded a bus Tuesday under deal struck by negotiators. Twenty Palestinians, described by the Israelis as terrorist gunmen, remained in the church.

Israeli officials said people not wanted by Israel would be released. Those accused of being terrorists would be given the choice of facing trial in Israel or permanent exile.

The standoff began April 3 after Israeli troops and tanks rolled into Bethlehem and the Palestinians took refuge in the church, which is built on the site where tradition says Jesus Christ was born.

In nearby Ramallah, Israeli troops continued to surround the compound of Palestinian Authority leader Yasser Arafat as U.S. and British officials worked out the details of an agreement to end the monthlong siege and allow Arafat to travel freely again.

Israel and the Palestinians have agreed in principle to a U.S. initiative that would end the standoff in return for placing six Palestinians sought by Israel on terrorism-related charges in a Palestinian prison under joint British-U.S. supervision.

One of the men is a top Arafat aide, Foaud Shubaki, the Palestinian Authority's finance minister, accused by Israelis of helping mastermind the smuggling of arms into Palestinian areas.

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Four of the men are wanted for last October's assassination of Israeli Tourism Minister Rehavam Ze'evi. Another is Ahmad Sa'adat, leader of the Popular Front for the Liberation of Palestine, which claimed responsibility for Ze'evi's murder.

American and British officials Tuesday inspected a jail in Jericho where the suspects would be held. They also met with Israeli Prime Minister Ariel Sharon.

Israel rejects U.N. fact-finders

Sharon's Cabinet voted Tuesday not to cooperate with the U.N. fact-finding mission in Jenin, despite earlier pledges to allow the U.N. team to investigate Palestinian accusations that Israeli forces carried out a massacre in a refugee camp there.

Israel strongly denies the charge, insisting that Palestinian deaths at the camp occurred during fierce fighting as its military tried to clear out "the fountainhead of suicide bombers."

An official with Human Rights Watch told CNN Sunday that 52 Palestinian deaths have been documented at the camp, including 21 thought to be noncombatants.

Israeli officials also said they believe 52 Palestinians were killed. Israel lost 23 soldiers during the fighting.

Figures compiled by aid agencies show that 140 of the camp's 1,896 homes were destroyed and 200 were damaged. One-quarter of the camp's population of 13,000 is now homeless, according to the agencies.

U.N. Secretary-General Kofi Annan said he wants to discuss the impasse Wednesday with the Security Council, which will make a final decision. One of his aides said earlier in the day that Annan was inclined to scrap the mission.

"I have no choice but to share my feelings with the council," Annan said late Tuesday. "We will see how the council reacts ... I will leave this matter to them."

The Security Council adjourned its Tuesday meeting without making issuing a statement on the impasse. It is scheduled to reconvene Wednesday at 5 p.m. in New York.

Speaking to CNN, Israeli Foreign Minister Shimon Peres said Cabinet members were concerned the U.N. team would be biased against Israel, which would result in an anti-Israeli judgment "even if she is right."

"If you have the wrong scale, you shouldn't be surprised if it gets the wrong weights," he said.

"We want to make sure the procedure will fit the intention of the [Security Council] resolution, and we have a full right [to know] that this will be true."

EU official: Israeli decision 'unacceptable'

A Palestinian man passes Israeli soldiers as he walks to his car Monday near Yasser Arafat's compound in Ramallah.

Israeli officials question the team's mission and operating rules, and they want to know what subpoena powers team members would have, according to diplomats. Israel also wants two advisers on military and police actions elevated to full members of the panel.

Saeb Erakat, Palestinian chief negotiator, said Israel is balking because it does not want the truth to come out.

"This commission should not be disbanded under any circumstances, and I urge the secretary-general to send, dispatch this team immediately," he said. "The world needs to know the truth."

Israel's decision was also termed "unacceptable" by Romano Prodi, president of the European Commission, the executive arm of the European Union.

"If the army has nothing to hide, there is no reason to delay from going forward. For Israel, this is a chance to show the world that it has nothing to hide," said Prodi, who said EU officials would ask President Bush to push Israel to cooperate when they meet with him in Washington this weekend.

-- CNN correspondents Mike Hanna and Matthew Chance contributed to this report.