U.N. Secretary-General Kofi Annan is considering disbanding the organization's fact-finding mission to the Jenin refugee camp, U.N. officials told Fox News Tuesday.

Annan's decision comes in the wake of Israel's determination not to allow the U.N. investigators to enter the West Bank camp, which was the scene of the heaviest fighting between Israelis and Palestinians in the last several weeks.

Israel's security Cabinet decided Tuesday not to cooperate with a U.N. inquiry until six Israeli demands had been met regarding the mandate and composition of the team. The team's departure from Geneva has been delayed since Saturday by Israeli objections.

U.N. officials described Annan as deeply disappointed and said it is highly unlikely that he will try to put together another team that Israel would accept. The "waters are poisoned" too much for that, one official said.

Undersecretary-General Kieran Prendergast said that "a thorough, credible and balanced report on recent events in Jenin refugee camp would not be possible without the cooperation of the government of Israel."

"Since it appears from today's Cabinet statement by Israel that the difficulties in the way of deployment of the fact-finding team will not be resolved any time soon, the secretary-general is minded to disband the team," he told reporters after briefing the Security Council.

Diplomats said Prendergast told council members that this meant Annan was leaning toward disbanding the three-member team, which has been joined by numerous advisers.

The Security Council met late Tuesday to consider the dispute over the fact-finding mission. Council diplomats said the next step would be for the council to express its sentiment about continuing the mission or disbanding it.

"We feel that the secretary-general, the international community, has been affronted by Israel," Ireland's U.N. Ambassador Richard Ryan said as he headed into the council meeting.

The Palestinians accuse the Israeli army of a massacre of civilians during eight days of fighting that left part of the Jenin camp in rubble. Israel says its army fought intense gunbattles with Palestinian gunmen, who were the main victims, stressing that 26 suicide bombers came from Jenin.

The United States put forward the resolution adopted by the Security Council welcoming the dispatch of a U.N. team to find out what happened in Jenin.

Arab nations circulated a new draft resolution late Tuesday for the council to consider which demands that Israel immediately receive the fact-finding team and authorizes the council "to take adequate measures it may deem necessary" if its previous resolution isn't implemented.

The draft resolution declares that the situation in the region constitutes "a threat to international peace and security" and would authorize the council to act under Chapter VII of the U.N. Charter which allows the use of military force.

Diplomats said a resolution in this form would almost certainly be vetoed by the United States, Israel's closest ally.

Prendergast noted that events on the ground were "moving rapidly and with every passing day, it becomes more difficult to determine what happened."

Elsewhere Tuesday, columns of armored vehicles rumbled out of the West Bank city of Hebron after a two-day incursion during which nine Palestinians were killed and about 250 were arrested, including 40 wanted men, the Israeli military said.

In the West Bank town of Jericho, U.S. and British experts toured a local jail Tuesday — another step in a U.S.-backed deal that would culminate in Palestinian leader Yasser Arafat's release from months of confinement at his West Bank headquarters.

Israel said it would release Arafat once six wanted Palestinians inside his compound had been transferred to the Jericho prison, where they would be held under U.S. and British supervision. Palestinian officials said the prisoners could be transferred within 24 hours, while Israel said there was no agreed upon timetable.

On Jenin, U.S. Ambassador John Negroponte said Annan was considering whether to let the fact-finding team begin its work in Geneva or "simply abandoning the mission ... on the assumption that satisfactory terms of reference could not be worked out."

No final decision has been taken on the mission, he said, and the United States will "fully respect" the secretary-general's decision.

"This is a shock for the Palestinian people and for every human being who believes in human rights," Ahmed Abdel Rahman, secretary of the Palestinian Cabinet, said of the U.N. developments. "What happened in Jenin was a crime during the day in front of the eyes of the whole world."

Annan said early Tuesday that the United Nations has worked to allay Israel's worries.

"We've really done everything to meet them, to deal with their concerns. And I think we've been very forthcoming," he said.

Israeli Foreign Minister Shimon Peres said "Israel feels that there was an attempt to put a blood libel against her, saying that we have killed 3,000 civilians in Jenin, when the fact is that all the civilians that were killed there — and I regret it — are seven persons."

"Forty-five armed Palestinians lost their lives, 26 Israeli soldiers lost their lives, but when it came to civilians, we are talking about seven persons not about 3,000," he said in an interview on MSNBC's Hardball With Chris Matthews.

Israel initially agreed on April 19 to the formation of the fact-finding team, when Peres stressed the country had "nothing to hide." But it then raised questions over the composition of the team, its scope of inquiry, who can be called as a witness and what documents will be presented to the panel.

Israel insists that its soldiers be protected from prosecution. It wants more counterterrorism experts to be added to the group, and demands that activities by Palestinian militants in the camp also be scrutinized.

The Associated Press contributed to this report.