But at least 150 Palestinian prisoners and guards gave themselves up, Israeli military sources said.

Gideon Ezra, Israeli public security minister, confirmed that troops were on a mission to arrest the four PFLP members almost a week after Mahmoud Abbas, the Palestinian Authority president, reiterated that he was ready to free Saadat.

The slain guard was named by a Palestinian security source as Ibrahim Abu al-Amin. He was shot dead inside the compound by Israeli gunfire.

Background

The agreement that kept six Palestinian prisoners under foreign watch in a Jericho jail was forged in an effort to end the Israeli siege of then-Palestinian leader Yasser Arafat's headquarters in the West Bank City of Ram Allah four years ago.

Israeli troops had surrounded the compound during Operation Defensive Shield in April 2002, demanding Arafat should turn over the six men who had sought refuge inside.

George Bush, the US president, negotiatedd the deal with Ariel Sharon, then the Israeli prime minister, that sent the six men to a Palestinian prison in Jericho. In return, Israeli soldiers pulled back from Arafat's compound.

After winning Palestinian parliamentary elections on 25 January, Hamas leaders said they wanted to release Saadat.

In a lecture at a women's gathering in West Bank on 7 March, Abbas said he would not mind releasing Saadat if PFLP sent him a written promise saying the movement would not hold the PA responsible for anything that might happen to Saadat after his release.

US and British officials sent a letter to Abbas last week, accusing the Palestinians of repeatedly violating the agreement and saying the security situation at the prison needed to be improved immediately or the monitors would leave.

The Israeli operation on Tuesday drew a furious response from Ismail Haniya, Hamas' prime minister-designate, who criticised the "dangerous escalation" and warned Israel against any attempt on the life of Saadat and his comrades.

For his part, the Israeli public security minister told public radio: "This operation was ordered by the prime minister in the fight against terrorism. We are committed to the murderers of minister Rehavam Zeevi remaining behind bars."

A spokesman for the Palestinian interior ministry in Gaza City said the British and the Americans had left the premises shortly before the operation began.

"We have information that the British and Americans left the prison this morning," Tawfiq Abu Khussa told AFP.

Israel warned

"The Americans and British left 15 minutes before the operation started. The Israelis asked the police and security forces to drop their weapons and not resist. If they refused, they said they would assault the compound," Abu Khussa said.

"We warn Israel against any incursion in the prison because it is under American and British control by international agreement."

Aljazeera's correspondent in Palestine Walid al-Umari quoted witnesses as saying that about 20 Israeli military vehicles on Tuesday surrounded the Palestinian presidential office and the Jericho prison.

The jail housed leftist Palestinian
politician Ahmad Saadat (file)

The forces imposed a curfew on the area adjacent to the prison amid intense shootings.

"We have been informed that gunfire was heard in the area, but no information whether the raid was targeting Saadat or surrounding the headquarters where many Palestinian activists are present," al-Umari said.

Mosques across Jericho called on citizens over loudspeakers to flock to the muqataa to protect the soldiers and prisoners inside the compound.

There were also demonstrations across the West Bank and Gaza Strip.

Hamas leader-in-exile Khalid Mishaal warned Israel against harming Saadat, saying it would be responsible for the consequences of its raid on the prison.

Mishaal's statement

Speaking to Aljazeera, Mishaal also called on Palestinians to rally around the Jericho jail, being bombarded by Israeli troops.

"We condemn this Israeli crime and hold Israel responsible for any consequences arising from this crime and warn them against harming Ahmed Saadat ... and all the prisoners in Jericho," said Mishaal.

"I call on our people in Jericho to throng around the Jericho prison," he added.

Mishaal called on the UN, Muslim and Arab countries and the international community to "take urgent measures to stop this crime".

Mr. Olmert says the Ariel settlement is part of Israel and will remain so forever. He says he hopes he will be able to insure that Ariel's territorial contiguity with Israel will be formalized in a border agreement by the year 2010.

At the same time Mr. Olmert says he intends to pursue negotiations based on the "road map peace plan," which calls on Israelis and Palestinians to reach a negotiated settlement towards a two-state solution.

Ariel which is about 60 kilometers north of Jerusalem lies in the heart of the West Bank. In recent days Mr. Olmert has said he intends to evacuate some West Bank settlements and move settlers who live in those settlements, to three large settlement blocs in the West Bank, including Ariel.

Akiva Aldar, a columnist with the daily Ha'aretz newspaper says the plan is popular with some Israelis who like the idea of unilaterally withdrawing from some Palestinian territory, and who do not see Palestinians as a reliable negotiating partners.

"I think you have all kinds of possible scenarios here that will be based on a platform that is suggesting interim arrangements and agreements and unilateralism, and the same kind of disengagement that does not require difficult decisions such as final status settlements, refugees and especially Jerusalem," he said.

Mr. Olmert says he has briefed U.S. officials about his plan to unilaterally draw Israel's final borders. The Israeli prime minister has said that since the militant group Hamas won Palestinian parliamentary elections Israel does not have a Palestinian partner to negotiate with. However, in a sign that Mr. Olmert may be softening his position, a key ally of Mr. Olmert, former Prime Minister Shimon Peres, held talks with Palestinian President Mahmoud Abbas on Sunday in Jordan.

U.S. officials, including President Bush, say they believe Israel will hold onto some settlement blocs in any agreement with the Palestinians, but that Israel should halt any further settlement construction in the West Bank, including construction that links large settlement blocs like Ariel to Israeli territory.

Israel launched its surprise raid on the prison minutes after U.S. and British monitors abandoned the building.

A day-long Israeli siege resulted in the capture of Saadat and sparked attacks on U.S. and British buildings by angry Palestinians and several kidnappings of foreigners.

Israeli Major-General Yair Naveh said there had been no coordination with the United States and Britain, but that Israeli forces began preparing for the raid weeks ago, after learning that international monitors planned to leave.

Naveh said Israel conducted observation missions and pre-positioned enough forces in the area to mount the raid at short notice.

In the March 8 letter, a copy of which was obtained by Reuters, the United States and Britain told Abbas that the monitors would be withdrawn "with immediate effect" unless the Palestinian Authority addressed their concerns.

They also expressed concern that Hamas Islamic militants, who won Palestinian elections in January, would free Saadat and the other prisoners after forming a new government. Abbas had also said publicly he would be prepared to free Saadat.

"The pending handover of governmental power to a political party that has repeatedly called for the release of the Jericho detainees also calls into question the political sustainability of the monitoring mission," the letter said.

Saadat was the leader of a Palestinian faction accused of killing an Israeli cabinet minister in 2001.

He was jailed in Jericho in 2002 under a U.S.-brokered deal between Israel and the Palestinian Authority that called for the United States and British to monitor them.

Businesses remained shuttered and schools closed across the Gaza Strip and West Bank after all Palestinian factions united to order a strike late Tuesday.

Palestinian security forces, ordered to respond with live fire to attacks against Western interests, remained on high alert after the Israeli operation sparked an unprecedented wave of security anarchy.

Two Palestinian security guards were killed and 26 others wounded, five of them critically, in the Israeli assault that ended with its aim: the capture of Saadat, four other PFLP cohorts and wanted Fatah member Fuad Shubaki.

The Israeli government strenuously denied that the raid -- less than a fortnight before a general election -- was motivated by political considerations, but kept security forces on high alert.

"Thousands of police officers, border guards and volunteers have been mobilised in sensitive areas of Israeli territory," police spokesman Mickey Rosenfeld told AFP.

Security was also beefed up around foreign interests, notably British and American offices, after Anglo-US targets suffered the brunt of unrest that inflamed the Palestinian territories on Tuesday.

A senior Palestinian official said that Abbas, in Jordan for talks with Prime Minister Maaruf Bakhit, would demand Israel hand Saadat and his colleagues back to their former custody arrangements immediately.

"We will ask the Israeli side to hand back Ahmed Saadat and his colleagues immediately," chief Palestinian negotiator Saeb Erakat said.

Saadat and three other PFLP members had been kept in Jericho under US and British supervision, since August 2002 after his militant faction claimed the 2001 killing of Israeli tourism minister Rehavam Zeevi.

"When Abu Mazen returns he will meet with the Palestinian leadership to discuss what happened yesterday at all levels and how the Palestinian Authority will conduct their policy after the Israeli attack on Jericho," Erakat said.

Although at least 10 foreigners were kidnapped in a wave of attacks to protest against the raid and perceived British collusion, just two French journalists and a South Korean television correspondent remained in captivity.

The PFLP said the three were still being held "because the Palestinian Authority had not managed to protect Ahmed Saadat". The leftist faction earlier vowed that their leader's capture would not pass without retaliation.

The French hostages were named as Caroline Laurent, a correspondent for Elle magazine, and SIPA agency photographer Alfred Yacobzadeh, who was also kidnapped in Beirut during the 1975-90 Lebanese civil war.

Seoul named their missing national as Yong Tae-young, 41, a correspondent for public broadcaster KBS, as the Korean government rushed to send an envoy to the Gaza Strip in a bid to secure his release.

Washington and the United States called for calm as Israel defended the operation amid mounting questions over why three British monitors at the prison were removed just minutes before the raid began.

Acting Israeli Prime Minister Ehud Olmert was quoted as telling a Russian-language newspaper that he "did not expedite the actions of the IDF (army)" when ordering the storming of the prison.

Defence Minister Shaul Mofaz insisted that Israel had no alterative as he claimed the Palestinian Authority was on the verge of freeing those suspected of being behind Zeevi's assassination.

"We have not been operating in Jericho for electoral reasons ... We had no choice but to intervene as no responsible state could allow the murderers of one of its ministers to be at liberty," Mofaz told Israeli public radio.

This morning, after US and UK guards withdrew from Jericho Prison, Israeli forces moved in and surrounded the prison. They demolished its walls with armoured bulldozers and, using megaphones, called on the inmates to surrender. There are reports that one Palestinian guard and one Palestinian prisoner were killed as the Israeli forces moved in. Israeli officials say they took action in order to arrest Ahmad Saadat and his co-detainees because the PA was intending to release them.

The UK and US contributed to perpetuating an extra-legal arrangement over the past four years during which Ahmad Saadat and his co-detainees were held arbitrarily by the PA. The sudden departure of the US and UK guards today contributed to the escalation of the situation that we are currently witnessing.

Amnesty International holds the Israeli authorities responsible for the safety of the detainees and staff in Jericho Prison. The organization reiterates its call on the Israeli authorities to end their policy of assassinations and excessive use of lethal force.