Mr. Jospin, who was speaking with the state-run France Inter Radio, noted in his remarks that Mr. Sharon’s policy of iron first would never succeed, as it has created a situation of total despair among the Palestinian population, a situation that encurages more suicide acts.

But Mr. Sharon said he would accept negotiating with the Palestinians only after he had hit them hard and intimidated.

"The Palestinians must suffer more and leave more casualities to realise that they could get nothing by spreading violence", he told reporters after the meeting of the secret cabinet.

"It won't be possible to reach an agreement with them before the Palestinians are hit hard. Now they have to be hit. If they aren't badly beaten, there won't be any negotiations. Only after they are beaten will we be able to conduct talks. I want an agreement, but first they have to be beaten so they get the thought out of their minds that they can impose an agreement on Israel that Israel does not want ... They must be beaten: the Palestinian Authority, its forces, and the terrorists" an angry Sharon said, adding, "if they aren't beaten there won't be any political horizon."

In answer to the remarks, Mr. Marwan Barqooti, the commander of the Force 17 urged all Palestinians to increase attacks against Israeli military positions "everywhere" and once again told Mr. Sharon that the soonest he leaves Palestine, the better for both the Israeli and Palestinian populations.

As the Palestinians succeeded mounting more suicide operations inside Israel, inflicting heavy tolls on the Israeli army in the one hand and the Israeli bombed more Palestinian targets, sealed off again Mr. Arafat’s office in Ramallah and sent more tanks inside refugee camps in Gazza and the West Bank, Egyptian President Hosni Mubarak proposed a summit meeting between Prime Minister Ariel Sharon and Palestinian leader Yasser Arafat at the Red Sea port of Sharm al-Sheikh.

Speaking in an interview with CNN during a visit to Washington, Mr. Mubarak also invited U.S. Secretary of State Colin Powell to join the meeting. Endorsing the proposal, Mr. Powell told reporters that it was "an interesting idea".

At a brief news conference after talking to Javier Solana, the European Union's "super minister" for Foreign and Security Affairs and special diplomatic envoy to the Middle East, Powell said the situation in the Middle East was "terrible".

Sharon said yesterday he would be happy to go, but "Arafat won't be able to go, because he'll be busy in Ramallah".

Powell said the Bush administration was redoubling its efforts to halt the strife and that a peace proposal by Saudi Crown Prince Amir Abdullah was a "positive and inmportant development".

"All of us will look at this vision and see what we can do to make this vision a reality", Powell said.

"I think it's an important step that we have welcomed and I wanted to share that with the crown prince - our reaction to his idea, and I hope that in the weeks ahead it will be fleshed out in greater detail", the American official said.

He was apparently referring to UN Security Council resolution 242 of 1967 which called for Israeli withdrawal from territories occupied in the 1967 Six Day War and said all countries in the region had the right to live in peace within secure and recognised borders.

Powell said: "I think at this point it was important for us to welcome the idea and in the weeks ahead we will flesh it out in greater detail before we start taking definitive positions on any aspect of the proposal. I want to make sure we have a common understanding on both sides".

While a senior aide to Mr. Sharon described the Saudi peace initiative "a positive trend", other said Israel would never agree to a return to the pre-1967 war borders.

Asked about the proposal, Katsav told reporters: "I very much hope that if a Saudi ruler will not come to Jerusalem, he will invite the rulers of Israel to Saudi Arabia. We would be happy to go to him. If we were invited to Riyadh, I would be glad to go there."

Foreign Minister Shimon Peres called the proposal "fascinating, interesting new opportunity",, adding that Israel should immediately respond favorably to the Saudi peace initiative, while reserving the right to negotiate over the provisions of the plan.

"The body of the Saudi position is more or less known to us, but what is important that for the first time Saudi Arabia, which had turned its back on Israel, didn't want to speak with it, didn't want to hear about Israel, is proposing to the Arab world normalising relations with us and recognising Israel", Peres told Israel Radio Monday.

"Obviously, success of any plan for resolving the Mid-East crisis and establishing a just and sustainable peace depends on dealing with essential issues including full liberation of the occupied lands, repatriation of refugees to the Palestine land and respecting the Palestinians' right of determining their future", the Iranian Foreign Affairs Minister Kamal Kharrazi told the official news agency IRNA, adding: "experience shows that the Zionist regime has played with even internationally endorsed plans and resolutions and continues its expansionist policies through blocking any efforts in this respect".

Mubarak's adviser, Osama al-Baz, is expected to visit Israel after the Egyptian President's visit to Washington. ENDS ISRAEL PALESTINE ESCALATION 6302