Israeli troops surround Arafat’s office

The army spokesman said soldiers surrounded the compound to prevent gunmen from entering but did not enter. Palestinians officials also said the Israeli forces remained outside the compound. Arafat was inside the compound and was unharmed, the officials said.

On Thursday, Israeli tanks and bulldozers crashed through the outer wall of the city-block-sized compound and blew up three buildings, retaliation for a Palestinian suicide bomb attack that killed 17 Israelis.

The latest incursion began at around 4am (2am BST). Soldiers moved among houses around the Amari refugee camp, next to Ramallah, entering one house as two trucks parked outside. One Palestinian was killed in the camp, doctors said.

Troops also moved through the suburb of Beituniyah, witnesses said, and were in control of all of Ramallah and neighbouring El-Bireh.

The Israeli army statement said the troops would remain in Ramallah for a ‘‘limited time’’ and had arrested nine terrorist suspects overnight. Also, soldiers detained several suspects in night-time raids in other parts of the West Bank, the statement said.

Israeli incursions are an almost daily affair. On Sunday, troops entered the town of Tulkarem.

Arafat’s new Cabinet includes a new minister to oversee the security forces. The move follows strong calls for reform by ordinary Palestinians and Western governments.

Palestinian information minister Yasser Abed Rabbo said that presidential and parliamentary elections would be held in January and municipal elections this autumn.

Arafat slimmed down his Cabinet from 31 to 21 ministers, and brought in several new faces. ‘‘It will be a smaller, more effective Cabinet,’’ said Nabil Shaath, planning minister in both the old and new Cabinet.

In the most important change, Arafat named Abdel Razak Yehiyeh, 73, as interior minister - a position that ‘‘will be responsible for all the security issues inside the Palestinian territories (and) supervise all the security establishments’’.

Arafat has come under intense pressure from the United States and Israel to revamp the security forces to prevent attacks against Israel.

Israeli defence minister Binyamin Ben-Eliezer reacted sceptically to the naming of Yehiyeh, saying it signified Arafat was not serious about reform.

‘‘This man represents the very old generation. So once again we have a commitment to the past and not to the future,’’ Ben-Eliezer said.

CIA director George Tenet met Arafat last week at his West Bank headquarters in Ramallah to press for the restructuring of the multiple, overlapping security agencies.

Yehiyeh, a former guerrilla commander, has not held any high-profile positions recently, and his selection bypasses more prominent figures.

‘‘Most Israelis will remember that this weekend that a young Israeli and his pregnant wife were murdered,’’ said Israeli government spokesman Dore Gold, referring to a Palestinian gunfire attack at a Jewish settlement. ‘‘Therefore, when they hear about this Cabinet reshuffling, they are going to see mostly smoke and mirrors and they are not going to be holding their breath.’’

Dogged by accusations of widespread corruption in his government, Arafat named a new finance minister, Salem Fayad. He has worked in Jerusalem for the International Monetary Fund in recent years, and has called for greater financial accountability in the Palestinian government.

Many Palestinians cite new elections as the most important reform. Since the Palestinian Authority was formed in 1994, elections have been held only once, in 1996.

In other developments yesterday, Palestinian police arrested a leader of the militant group Islamic Jihad, which took responsibility for a suicide attack last week in which 17 Israelis were killed.

Sheik Abdullah Shami was arrested in his neighbourhood in Gaza City, group officials said. Arafat’s leadership issued orders to arrest Islamic Jihad members after the Wednesday bombing.

In an article in the New York Times, Sharon wrote that Israel was prepared to resume negotiations if Palestinian attacks stopped, although he did not believe a final settlement could be reached now.

‘‘The only serious option ... is one based on a long-term interim agreement that sets aside for the future issues that cannot be bridged at present,’’ Sharon wrote. The Palestinians reject the idea of an interim accord.

Bush also met Egyptian president Hosni Mubarak this weekend, part of a flurry of diplomatic contacts aimed at ending 20 months of Middle East violence and restarting peace talks. Several months ago the Arab League adopted a Saudi proposal for peace with Israel in exchange for a return of all occupied lands.

But Sharon, citing Israel’s security concerns, said Israel would not pull out of all the West Bank and Gaza Strip, which it captured in the 1967 war, or redivide Jerusalem. ‘‘Israel will not return to the vulnerable 1967 armistice lines,’’ he wrote.

The Palestinians want the West Bank and Gaza for their future state, with a capital in east Jerusalem.