Bush says Arafat enhances terror with smuggling

WASHINGTON -- President Bush assailed Yasser Arafat's Palestinian Authority on Friday for "enhancing terror" by trying to smuggle weapons from Iran and was considering a range of harsh U.S. sanctions including suspension of diplomatic contact.

There was no immediate presidential decision. But senior administration officials said even the least hawkish option, recommended by Secretary of State Colin Powell, would require Arafat to take specific anti-terror actions before the United States would renew its suspended mediation role in the Middle East.

In the West Bank town Ramallah, a top Arafat adviser said severing ties would "cause an earthquake" in the Middle East.