JERUSALEM -- Prime Minister Ariel Sharon, defending Israel's killing of a top Hamas bombmaker, said Monday that "there is no compromise with terror." Hamas extremists vowed revenge.
The threats came as a top Palestinian official said the United States will find no Palestinian willing to negotiate in place of Yasser Arafat, whom Israel holds ultimately responsible for all the attacks against its people because he has not taken serious steps to stop them.
President Bush's Mideast peace plan calls for replacing the Palestinian leader as a necessary first step to obtaining Washington's support for a provisional Palestinian state.
On Sunday, Secretary of State Colin Powell ruled out any immediate talks with Arafat.
While many Palestinians are loyal to him, Arafat faces growing frustration among his people after 21 months of conflict with Israel and mounting economic hardships.
In Gaza City, about 4,000 Palestinians marched on Arafat's headquarters, complaining that he has been unable to ease their economic woes. Arafat has not been in Gaza since late last year, and Israeli tanks are again trapping him in his West Bank headquarters in Ramallah.
Pita protesters march
Some protesters attached pita bread to their signs as a symbol of their struggle for daily bread. Up to now, Palestinians have blamed Israel for their difficulties, noting Israeli travel restrictions that have crippled the Palestinian economy.
In Jerusalem, meanwhile, Sharon gave strong backing to Bush's Mideast initiative, saying far-reaching reforms are needed to jump-start the peace process and that Israel is coordinating closely with the United States on how to proceed.
"We have interest in starting a process in order to advance to a diplomatic stage," Sharon told a meeting of Likud party members.