Updated

Israeli Prime Minister Ariel Sharon staked out tough positions on Jewish settlements, suggesting in remarks published Tuesday that he will try to hold on to much of the West Bank's heartland.

Sharon spoke after U.S. Secretary of State Colin Powell failed to win Israel's acceptance of a new Mideast peace plan, and days before the Israeli leader was to meet his Palestinian counterpart, Mahmoud Abbas, in the first summit in nearly three years.

Sharon told The Jerusalem Post daily in an interview that Israel would hold on to some settlements in the heart of the West Bank, citing three by name — Beit El, Ariel and Emmanuel.

Israeli control over those areas would make it extremely difficult to establish a territorially contiguous Palestinian state in the West Bank, a goal of the U.S.-backed plan, the so-called "road map" to Mideast peace.

Sharon is to discuss his objections to the plan with President Bush at the White House next week.

Powell said during his weekend visit that settlements would be an issue in the Sharon-Bush talks; the road map demands that Israel dismantle dozens of smaller West Bank outposts and freeze all construction in the 150 veteran settlements in the first stage of the plan.

However, Sharon insisted there was no U.S. pressure on Israel to halt construction.

"There is no pressure from anyone. It is only pressure from the Jews on themselves," he told the Post, which published excerpts of the interview Tuesday.

Asked whether Jews would continue to live in Beit El, a settlement just north of the Palestinian town of Ramallah, Sharon said: "Jews will live there."

When asked whether they would be under Israeli rule, he said: "Do you see a possibility of Jews living under Arab sovereignty? I'm asking you, do you see that possibility?"

Sharon appeared to be reversing himself. In an interview with the Haaretz daily last month, he suggested that Israel was ready to part with West Bank areas of biblical significance, citing Beit El and Shilo.

In the interview with the Post, Sharon said that two large settlements in the heart of the West Bank, Ariel and Emmanuel, would be on the Israeli side of a barrier now under construction to keep out Palestinian militants. This would mean that significant parts of the West Bank would be west of the barrier — on the side that would be connected to Israel proper.

Sharon reiterated his support for the idea of Palestinian statehood, and said Israeli troops would eventually leave West Bank towns they occupied in the past year in response to shooting and bombing attacks.

"I don't think we can continue to control another people," he said. "I think it is bad for us, and bad for the Palestinians. How long can we continue to sit in all those cities?"

The Israeli leader has suggested in the past — though never in a formal offer — that the Palestinians could have about half of the West Bank, composed of disconnected islands of land, as an interim solution that would remain in place for many years.

The Palestinians have rejected the idea, saying they are entitled to all the West Bank, Gaza Strip and east Jerusalem, the areas Israel captured in the 1967 Mideast war.

The road map calls for an end to Israeli occupation and is based, in part, on an Arab peace initiative that offers comprehensive peace in exchange for an Israeli withdrawal from all occupied lands.

Sharon was to meet on Friday with Abbas, the first top-level Israeli-Palestinian talks in nearly three years.

Sharon has refused to see Yasser Arafat, and the United States has accepted Sharon's boycott of the veteran Palestinian leader, charging that Arafat is involved in Palestinian terrorism.

European nations reject that approach, however. Visiting Greek Foreign Minister George Papandreou is to meet Arafat late Tuesday, after talks with Sharon. Greece holds the rotating EU presidency.

Papandreou called on Israel to "help the new Palestinian leadership" under Abbas, and said he would tell Arafat and Abbas that "it is absolutely necessary to move forward, especially on the issue of security."

Israel is demanding concrete Palestinian steps against militants responsible for attacks against Israelis as a condition for movement on the road map.

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.

In other developments Tuesday, police arrested the leader and 13 members of Islamic Movement, the largest Arab political group in Israel, on suspicion they funneled millions of dollars to Hamas.

The police minister, Tzahi Hanegbi, said the movement "inflamed the bonfires of terrorism." Hamas has carried out scores of suicide attacks.

The arrests marked a further downturn in relations between the Israeli authorities and the 1.2 million-strong Arab minority. Tensions have been running high since police killed 13 Israeli Arab protesters in anti-government riots in October 2000.

In new violence, Palestinians fired mortar shells at an army base in the Gaza Strip, injuring nine soldiers.