An Israeli statement that talks to arrange a cease-fire would be held Sunday was retracted late Saturday in what Israeli officials attributed to a media misunderstanding.

Initially, Raanan Gissin, spokesman for Israeli Prime Minister Ariel Sharon, said that Sharon, U.S. envoy Anthony Zinni, and Palestinian leader Yasser Arafat would meet Sunday with the intention of calling a cease-fire.

"Tomorrow a three-way meeting will be coordinated, involving the senior echelon of both sides, headed by the prime minister, for the purpose of bringing about a declaration of a cease-fire," Sharon's office said in a statement. The statement added that the two sides intend to immediately implement a U.S. truce plan hammered out last year by C.I.A. Director George Tenet.

That statement was subsequently clarified by Gissin, saying that the cease-fire would not be called on Sunday, only arranged for a future date.

U.S. and Palestinian officials expressed surprise to the reported meeting. The U.S. Embassy said Zinni has discussed several possibilities but that "no decisions have been taken on the next steps." Palestinians said no meeting had been scheduled.

Finally, Sharon's office issued a statement saying that no meeting had been arranged.

Repeated efforts to arrange a cease-fire have failed in the nearly 18 months of Mideast fighting, with the worst violence occurring this month.

Zinni has sounded upbeat since his arrival Thursday, and the atmosphere has improved a bit since Israel pulled its army out of three Palestinian towns.

Zinni had been expected to hold protracted negotiations before there was any likelihood of a cease-fire.

The U.S. envoy met Arafat at his West Bank headquarters in the town of Ramallah Saturday and then spent five hours speaking with the Palestinian leader's top aides. Zinni later met Sharon in the evening at his desert ranch in southern Israel.

"I believe the coming 24 hours will be a real test for the seriousness of the Israeli government and the ability of the U.S. administration," Nabil Abu Rdeneh, a spokesman for Arafat, said before the Israelis announced the cease-fire plan.

Saturday was mostly quiet, though Israeli soldiers shot and killed a Palestinian taxi driver traveling through the West Bank city of Hebron in an area under curfew, Palestinian officials and witnesses said. The army said it was unaware of the incident.

Some 4,000 Palestinians, many waving the flags of various Palestinian militant groups, turned out for the joint funeral of the driver and another Palestinian killed in Hebron a day earlier. "No cease-fire," chanted the crowd, urging militants to carry out more attacks.

In Nablus, also in the West Bank, Palestinian militiamen executed two Palestinians convicted of collaborating with Israel. The two men had already been sentenced to death in a Palestinian security court, but escaped from prison a week ago after Israeli shelling. It was the third instance this week in which Palestinian militiamen killed alleged or convicted collaborators.

Zinni has arrived during the bloodiest stretch of fighting since the violence erupted in September 2000.

In March alone, 192 people have been killed on the Palestinian side and 62 people on the Israeli side. March also saw the largest Israeli military operation since the 1982 invasion of Lebanon, with Israel deploying 20,000 troops in the West Bank and Gaza Strip in response to a string of Palestinian bombings and shootings.

The Palestinian side said U.S. pressure on Israel to withdraw from Palestinian-controlled areas gave Zinni's mission a greater chance of success. Israel pulled out of Ramallah and two other Palestinian towns in the West Bank on Friday.

Israeli officials say they have no intention of keeping the military in Palestinian areas indefinitely, but cannot withdraw from the other two towns now because the Palestinian Authority is not doing enough to prevent militants from attacking Israel.

Israeli Foreign Minister Shimon Peres said Palestinian militants attempted to carry out seven suicide attacks Thursday, but all were thwarted by Israel's security forces. He did not give additional details.

Peres also said Israeli had scaled back it military actions for now. "We have taken some unilateral steps to reduce the flames."

The Israeli incursions into Palestinian towns and cities over the past two weeks have drawn widespread international criticism. And some Israelis have questioned whether they were effective in rooting out militants, many of whom managed to escape.

But Lt. Gen. Shaul Mofaz, the chief of staff of Israel's army, said the actions have helped prevent additional suicide bombing attacks.

"There could have been a lot more suicide attacks if the army hadn't carried out this broad operation," Mofaz told Israeli television. "The terror reached such a level that in my opinion there wasn't a choice but to carry out such an operation."

Meanwhile, for a second straight day, thousands of Arabs took to the streets across the Middle East on Saturday to burn Israeli and American flags and express anger over the rising Palestinian death toll.

Some 5,000 protesters demonstrated in Amman, Jordan, some waving pictures of Iraqi President Saddam Hussein and calling on him to attack Israel – as he did with missiles during the 1991 Gulf War. They also appealed to Usama bin Laden, the accused mastermind of the Sept. 11 attacks.

"Saddam, please strike Tel Aviv!" and "Bin Laden, you are dear to us, bomb Tel Aviv!" the protesters chanted before a squad of 200 police officers who kept them from a U.N. building.

In Cairo, 4,000 Egyptian students chanted anti-Israeli slogans and burned Israeli and American flags.

The Associated Press contributed to this report.