Israel has halted the release of Palestinian prisoners, demanding the Palestinian Authority crack down on militants before anyone else is freed.
The move is a blow to a ceasefire that has drastically reduced bloodshed.
Yesterday’s decision followed a declaration last week that Israel would not hand over three more West Bank towns to Palestinian control for a similar reason - a claim that Palestinians had not moved against militants in the two towns they took over patrolling since the February 8 truce.
Palestinians accused Israel of stalling.
Israeli and Palestinian officials met to discuss the prisoner issue, but the meeting ended in disagreement.
Palestinians accused Israel of breaking the terms of the truce, endangering its continuation and weakening the new Palestinian leader, Mahmoud Abbas.
The Israelis repeated Sharon’s statement from a Cabinet meeting a few hours earlier, where he said he would instruct his negotiators to make it clear to the Palestinians that no more prisoners would be released until the Palestinians reined in militants, meeting participants said.
“We won’t strengthen Abbas at the expense of Israeli lives,” Sharon was quoted as saying.
According to the ceasefire terms, Israel pledged to hand over five West Bank towns to Palestinian control and free 900 prisoners.
However, Israel stopped the process after two towns were turned over and 500 prisoners freed, saying the Palestinians were not fulfilling their obligations – stopping all violence and disarming militants in towns under their control.
Israel is holding about 8,000 Palestinian prisoners.
Palestinian negotiator Saeb Erekat accused Israel of stonewalling.
Abbas is in dire need of a boost to his prestige after the militant Islamic Hamas group made inroads in local elections on Thursday, ahead of parliamentary elections in July, in which Hamas will be fielding candidates for the first time.
Meanwhile, Israeli police are preparing for demonstrations today in Jerusalem because of rumours that Jewish extremists will try to enter a hotly-disputed holy site, where the Al-Aqsa Mosque compound sits atop the ruins of the biblical Jewish Temples.
Police said they would prevent the Jews from entering the site, but hundreds of Muslims were already gathering there last night to confront them. A similar demonstration planned by Jewish extremists a month ago fizzled out.
In another development, Israeli police arrested a settler activist in the West Bank and placed him under administrative detention until September 30.
He is the first settler to be detained until after the summer’s planned Israeli pullout from the Gaza Strip and part of the West Bank.
Officials said the activist was suspected of “involvement in terror”.