Resolution of the standoff at the Church of the Nativity will be delayed because no country is willing to take in the suspected Palestinian militants holed up in the shrine, Israel said.
Israel and the Palestinians on Tuesday agreed on broad terms for ending a 36-day standoff at the Bethlehem church, including the deportation of 13 suspected militants, but said a few technical problems still needed to be resolved.
One sticking point was where to send the deportees. Negotiators had named Italy as the destination, but a U.S. diplomatic official acknowledged that the Italians had largely been kept out of the loop. Israel later said that no country was willing to take in the Palestinians.
Italy said it would consider taking the 13 men if such a request were made. "There are still things to clarify: for example, in what capacity would they come to Italy?" said Italian Defense Minister Antonio Martino.
One of the top wanted men in the church, built over Jesus' traditional birthplace, said he and the 12 others have agreed to go into exile. Another 26 gunmen would be transferred from the besieged compound to the Gaza Strip, said the wanted man, Abdullah Daoud, the head of Palestinian intelligence in Bethlehem.
"If nothing goes wrong, I expect to be deported to Italy with my colleagues this afternoon," Daoud told The Associated Press in a telephone interview.
There were signs Tuesday afternoon that the Israeli military was preparing for an end to the standoff. Troops erected four large white panels near the low-slung "Gate of Humility" -- the basilica's main entrance -- apparently to keep those emerging from the view of journalists watching from rooftops overlooking Manger Square. The military also set up two metal detectors near the entrance.
The Israeli defense minister, Binyamin Ben-Eliezer, said that "this agreement is already sealed," and that he expected it to be carried out within hours.
Ben-Eliezer said he has given orders to troops to prepare for a withdrawal from Bethlehem, and that he expected Israeli troops to have left all Palestinian-run areas by Wednesday morning.
A pullout from Bethlehem would mean that Israel's military offensive in the West Bank, launched March 29 against Palestinian militants, would effectively come to an end. "We are glad that the tragedy has ended," said Bethlehem Mayor Hanna Nasser, referring to the expected end to the standoff and a troop pullout.
Javier Sancho, a spokesman for the European Union in Israel, said that there were contacts with Italy Tuesday afternoon on the proposed "modalities" of the deportations, and that the Italians were considering the proposals.
According to a U.S. official, who spoke on condition of anonymity, the 13 were to be transported by U.S. officials to the airport and then sent to Italy under British guard.
A senior Israeli government source said the Italian government had complained to Israel about not being sufficiently consulted on the deportations.
In Washington, meanwhile, Israeli Prime Minister Ariel Sharon was to meet later Tuesday with President Bush, who has been pushing for an Israeli withdrawal from all Palestinian-run areas.
"Big lies," Yasser Arafat told NBC's "Today" when shown a document that Sharon was to present to Bush accusing the Palestinian leader of directly funding terrorist operations.
"Give me one evidence," Arafat said. "I challenge you! I challenge you with all this trifle, issues was written in this book, to give me one evidence. You are now asking me why I am giving money to my people who have lost for more than 19 months, their jobs because the Israelis have kicked them out?"
More than 200 people fled into the Church of the Nativity, Bethlehem's main landmark, ahead of invading Israeli forces on April 2.
They included several dozen gunmen, including some the Israelis say were involved in attacks against Israelis. Also inside are civilians, clerics and police, as well as 10 demonstrators who slipped past the Israelis into the church last week to show solidarity with the Palestinians.
Early Tuesday, the 39 gunmen in the church signed documents saying they agreed to their intended destination -- Gaza and Italy, respectively, said a source in the church, adding that those in exile would have to remain abroad until there is a Palestinian state.
Those slated for deportation came under some last-minute pressure not to accept. The leader of the Islamic militant group Hamas, Sheik Ahmed Yassin, called one of his followers in the compound, Aziz Abayat, and told him that in going into exile, he would not have the group's backing. "Sheik Yassin told us that ... anyone who accepts exile does not represent the movement's position," Abayat said.
A senior leader of Arafat's Fatah movement in the West Bank, Hussein al-Sheik, criticized the Palestinian Authority for accepting exile as an option, saying it set a dangerous precedent. Deportations are considered by many Palestinians as the bitterest of punishments. Israel ended the practice a decade ago.
As word spread in Bethlehem that the standoff might end soon, some of relatives of those slated for deportation flocked to Manger Square, hoping to be able to say goodbye to those inside the church.
Zahia Khamis, 72, came to bid farewell to her nephew, Anan, an activist in the Al Aqsa Martyrs' Brigade, a militia linked to Arafat's Fatah movement. Speaking to her nephew by mobile phone, she said: "I am crying because you are leaving your town. I know it is not your choice, but take care."
Khamis said her nephew told her he had no option but to accept exile.
The outline of the Bethlehem deal was put together in intensive negotiations over the past few days. The CIA, Vatican and European Union were all involved in efforts to end the confrontation.
Israel dropped its demand for the surrender or exile of all the gunmen in the church, and the Palestinians agreed to exile some of them. Over the past day, the haggling has been over the number to be exiled.
Before dawn Tuesday, two Palestinian liaison officers with the Israeli military, Ribhi Arafat and Farouk Amin, entered the Church of the Nativity to obtain the agreement of the 13 to being sent into exile.
According to a Palestinian list of names obtained by The Associated Press, nine Al Aqsa militia men, three Hamas members and Daoud are slated for deportation.
Several of those on the list are accused by Israel of involvement in bombing and shooting attacks on Israelis. One of the Al Aqsa gunmen, Ibrahim Moussa Abayat, killed two Israelis and an American, Avi Boaz, according to Israel.
Daoud denied Israel's allegations that he organized attacks on Israelis, produced explosives, smuggling weapons, and provided shelter to members of terror groups. The intelligence chief, who holds a B.A. in political science from a West Bank university, said he hoped to continue his education in Italy.
Early Tuesday, Israeli forces entered the West Bank town of Tulkarem. The military said their mission was to stop the sending of suicide bombers and "attack the terrorist infrastructure." A military statement said the operation would last "a short time."
Also Tuesday, on the Gaza-Egypt border, a 17-year-old Palestinian was killed and two were wounded when Israeli forces opened fire while destroying a building, residents said. The Israeli military said armed Palestinians attacked soldiers, who returned fire, hitting two. The area is the scene of almost daily clashes.
The Associated Press contributed to this report.