The latest plan to deal with Palestinian terrorists, which follows
the deaths of more than 30 Israelis in a single week, was hammered
out at last Friday's security cabinet meeting.

It came as Israel's armed forces warned of a "crushing military
offensive" against West Bank militants. Up to 2,000 reservists
have been called up in recent days.

But despite the strong words, diplomatic sources believe the
latest initiative is a sign of desperation, signalling Israel has
exhausted its options on fighting terrorism - having ruled out
negotiation.

One senior source said: "It is all very well to talk about
crushing offensives, but who and what is Israel going to hit which
has not already been attacked? Israel has simply run out of ideas
how to deal with Palestinian terrorism. It has tried everything
militarily and the situation keeps getting worse. The worst thing
is the bad guys, on both sides, are the ones who are now winning."

The sources point to the failure of a series of hardline Israeli
measures aimed at combating the violence.

The policy of assassinating militant leaders, they say, had as
little success in reducing the violence as April's massive
military incursion into West Bank cities, ostensibly designed to
dismantle terrorist networks. A policy of isolating the
Palestinian leader, Yasser Arafat, has also had negligible effect.

The plan to deport families to Gaza will be examined by Israeli
legal officials amid concerns that it would almost certainly
breach international conventions, if not Israeli law.

However, its proponents, including the regional cooperation
minister, Roni Milo, are pushing for the government to declare a
state of emergency, which they argue would create the legal basis
for deportations and home demolitions. "The war against terror
necessitates enabling the legal system to make the changes
necessary to succeed in this war," Mr Milo said.

Details of the plan emerged as the Israeli defence forces (IDF)
took formal control of the first area designated for full military
reoccupation. An IDF commander informed the mayor of Beitunia,
until then part of Palestinian Authority area A, that the army now
had full responsibility for security.

The army also distributed leaflets which informed residents: "The
Granite battalion will take over and occupy the town of Beitunia,
will impose a curfew on the town and will prevent all access to it
in order to ensure the transfer of military security from the
Palestinian Authority to Israel for an extended period."

Israel's defence minister, Binyamin Ben-Eliezer, said yesterday
that the operation would not entail a re-establishment of the
civil administration, which oversaw all civil affairs before the
Palestinian Authority was established.

As Israeli troops moved into other West Bank towns, Ahmed Abed
Rahman, an Arafat aide, told the Guardian that the policy of
reoccupation would be fruitless. He added that, faced with
occupation, Palestinians could only reply with the "language of
struggle and resistance".