The Israeli and Palestinian (search) prime ministers planned to meet this week in the highest-level encounter in three years, but the two sides disagreed sharply about a new U.S.-backed Mideast peace plan.
In Israel (search), police arrested the leader and 13 members of the Islamic Movement (search), the largest political organization of Israel's Arab minority, on charges they funneled millions of dollars to the violent Hamas group.
In new violence, Palestinians fired mortar shells at an army base in the Gaza Strip (search), injuring nine soldiers. In the West Bank, troops blew up a carpentry shop in an apartment building, saying it served as an explosives lab. The blast and subsequent fire damaged eight apartments.
International efforts to promote the "road map" plan -- aimed at ending 31 months of violence and setting up a Palestinian state -- remained intense.
As U.S. Secretary of State Colin Powell (search) left the region Monday after failing to extract an Israeli pledge to accept the plan, Greek Foreign Minister George Papandreou, whose country holds the presidency of the European Union, arrived to keep the pressure on.
The meeting between Israeli Prime Minister Ariel Sharon and his Palestinian counterpart, Mahmoud Abbas, will take place Friday, said Israeli Foreign Minister Silvan Shalom. Palestinian officials confirmed a meeting would take place by week's end.
The last meeting between Israeli and Palestinian leaders was in 2000, when then-Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat were engaged in U.S.-backed peace talks that eventually broke down, and violence erupted.
Sharon has refused to see Arafat, and the United States has accepted Sharon's boycott of the veteran Palestinian leader, charging that Arafat is involved in Palestinian terrorism.
However, European nations reject that approach. Papandreou is to meet Arafat late Tuesday after seeing Sharon.
After meeting Shalom, Papandreou said his message to all, including Arafat, was to support the road map. "This is an opportunity we must not allow again to fail," he said.
He said he would tell Arafat and Abbas that "it is absolutely necessary to move forward, especially on the issue of security."
Palestinians have accepted the road map, a three-stage blueprint that begins with an end to violence, Israeli army pullbacks and a halt in settlement building in the West Bank and Gaza Strip. It then allows for a Palestinian state with provisional borders -- perhaps by the end of the year -- and hopes to resolve tough issues like borders, Palestinian refugees and Jerusalem in the last stage.
Israel has presented 15 objections. The main one is that Israel wants its concessions to follow a Palestinian dismantling of terror groups, while the Palestinians say steps must proceed in parallel, as the road map suggests.
Sharon is to discuss the Israeli points with Bush next week in Washington. Powell said those talks will include the question of Israeli settlements, but Sharon said he does not expect a confrontation.
"There is no pressure from the United States," Sharon said Monday. "We have a special relationship based on trust."
Also Monday, the Israeli military banned foreigners entering or leaving the Gaza Strip, citing security needs. The ban, the harshest in years, included reporters and aid workers.
The local Foreign Press Association demanded access for journalists be restored and charged that the closure was "extremely disturbing and suggests an utter disregard for basic press freedoms."
Later Monday, the army spokeswoman issued a statement easing the closure, saying journalists wishing to enter Gaza must register with the army in advance and affirming the army is "aware of the importance of unimpeded access" to Gaza, which is home to more than a million Palestinians and about 6,000 Jewish settlers.
Three days earlier, the army had announced that foreigners entering Gaza would have to sign a form undertaking not to enter "combat zones" and appearing to release the army from responsibility for their safety.
That appeared aimed at the International Solidarity Movement, a Palestinian-backed group whose members often position themselves between Israeli forces and Palestinians. In recent weeks, one member has been killed and two seriously wounded in clashes with Israelis, and Israel is moving to deport ISM activists.
In Israel, the police minister, Tzahi Hanegbi, accused the country's Islamic Movement of collecting millions of dollars for Hamas under the guise of charity and said the money "inflamed the bonfires of terrorism."
The arrests were expected to heighten tensions between Israel's large Arab minority and the authorities, already strained since police killed 13 Arab protesters in anti-government riots in October 2000.