Associated Press WriterGAZA CITY, Gaza Strip (AP) -- Israel severed all contact with Yasser Arafat on Thursday, launching airstrikes and sending troops to Palestinian towns after a bus ambush that killed 10 Israelis. Arafat's spokesman called the moves "an official declaration of war."
Another top Palestinian official said Israeli strikes had rendered the Palestinian Authority unable to fulfill its commitment to crack down on terror.
The strikes on Thursday killed one man in the West Bank town of Ramallah, and a 40-year-old woman died of a heart attack when Israeli warplanes bombed targets in Gaza, Palestinian officials said. Forty people were hurt in Gaza, officials added.
During the strikes, Israeli planes also struck a building in Arafat's headquarters compound in Ramallah, Palestinian security officials said. Arafat was in a building nearby but was not evacuated, Palestinian officials said. Maj. Gen. Dan Harel, chief of Israeli military operations, said the Palestinian leader was not a target.
The violence and harsh words appeared to mark a new crisis point in the bitter 14-month old conflict and threatened to wreck U.S. efforts to arrange a truce.
Israel's Security Cabinet ruled out talks with Arafat hours after the Palestinian leader bowed to long-standing Israeli demands and ordered all offices of the militant Hamas and Islamic Jihad groups closed, but did not outlaw them.
The Cabinet statement said Arafat was "directly responsible" for the bus ambush "and therefore is no longer relevant to Israel, and Israel will no longer have any connection with him." Israel Army Radio said low-level talks between the two sides continued.
Hours later, after a night of strikes in Gaza and the West Bank, the Palestinians backed away from the pledge to shut Hamas and Islamic Jihad offices -- and from Arafat's long-standing promise to crack down on militants.
"It's impossible for the Palestinian leadership to implement its commitment under the shadow of this comprehensive war," said Palestinian Information Minister Yasser Abed Rabbo. "We are committed to all that we promised but we can't implement it."
He said he was referring to Arafat's broad promise to crack down on terrorists and the Wednesday pledge to shut the Hamas and Islamic Jihad offices. By early Thursday, no offices had been closed.
The ominous moves from both sides followed a day of violence and retaliation Wednesday.
Ten Israelis were killed and about 30 wounded when Palestinians set off a bomb and opened fire on a bus and several cars in the West Bank. At the same time, two Palestinian suicide bombers blew themselves up next to Israeli cars in Gaza.
U.S. envoy Anthony Zinni, in the region to negotiate an end to nearly 15 months of Palestinian-Israeli violence, said Arafat and his administration "must act against these groups and they must act now."
In retaliation, Israeli planes and helicopters struck targets around Gaza and the West Bank late Wednesday and early Thursday. Bombs from Israeli warplanes knocked down structure after structure in Gaza's police headquarters, setting a huge fire.
Israeli troops also entered Ramallah at three points. Soldiers in six tanks took over the home of a top Palestinian official, Marwan Barghouti, in the northern part of the city, cutting off the phones, witnesses said.
The army did not comment, and it was not clear if the soldiers were trying to capture Barghouti, the leader of the Tanzim militia of Arafat's Fatah part. Barghouti was nearby but escaped, while his wife, children and other relatives remained inside.
Israel accuses Tanzim of involvement in several attacks on civilians. Any Israeli attack on Barghouti personally would stoke tensions considerably.
At midmorning, Israeli troops were just several hundred yards away from Arafat's Ramallah office.
Israeli missiles hit Ramallah's main radio transmitter in Ramallah, knocking it off the air, the military said. Bulldozers flattened the building later. Soldiers also detonated explosives that toppled a 90-foot radio and television tower nearby.
Brig. Gen. Ron Kitrey said Israeli troops were digging in around Ramallah and other towns. Tanks were stationed at the busy Netzarim junction in the Gaza Strip, closing the area's main north-south artery and forcing residents to travel along a stretch of beach.
Israeli Justice Minister Meir Sheetrit said Israel had reached "the moment of truth" in its battle against terrorism. From now on, "Israel will defend itself" and not look to Arafat for help, he said.
He said there would be no more contact with Palestinian Authority bodies. Meetings of security commanders arranged by Zinni would cease.
Arafat spokesman Nabil Abu Rdeneh called Israel's military moves "an official declaration of war against our people. ... This war will lead the region to more instability and destruction."
Since Nov. 26, when Zinni arrived, 50 Palestinians and 44 Israelis have been killed in violence. The Palestinian toll includes 18 armed attackers and 10 suicide bombers.
The Palestinian leadership rejected Israeli charges that it was responsible for the repeated attacks, saying the Israeli response was undermining its efforts against militant groups.
The leadership denounced the Wednesday attacks and insisted that it is "working intensively and continuously to restore quiet and security despite the Israeli escalation."
The Israeli defense ministry said some of the gunmen who attacked the Israeli bus in the West Bank had been on a list of 33 suspected militants Zinni recently gave to the Palestinians.
The gunmen ambushed the bus Wednesday as it headed to the settlement of Emanuel, not far from Nablus. Soldiers killed one of the attackers, the military said.