AP Special CorrespondentRAMALLAH, West Bank (AP) -- Blowing kisses to children and flashing V-for-victory signs, Yasser Arafat toured his battle-scarred West Bank capital on Thursday, vacated only hours earlier by Israeli troops and tanks.
"These children will fly our flag over Palestine," the Palestinian leader vowed as cheering children waved tiny plastic Palestinian banners.
Even as the siege of Arafat's headquarters ended, the standoff at the Church of the Nativity in Bethlehem, one of Christianity's holiest shrines, appeared to harden. During a 12-hour span, two shootouts and a fire broke out in the compound, though not in the 4th-century basilica itself, triggering angry accusations and counter-charges by Israel and the Palestinians.
A leading human rights group, meanwhile, said there was no evidence to support Palestinian allegations that Israeli troops carried out a massacre at the West Bank refugee camp of Jenin, scene of furious fighting last month.
But the report by U.S.-based Human Rights Watch, which spent a week gathering testimony at the camp, said many civilians were killed "willfully and unlawfully" and that other serious abuses, some of which could be war crimes, were documented.
The group and others have so far confirmed 52 deaths in the camp, including those of 22 civilians. Israel says the death toll was likely in the dozens, with most of them gunmen and other combatants.
Danny Ayalon, foreign policy adviser to Israeli Prime Minister Ariel Sharon, said the report showed there was no truth to the charges of a massacre. "I flatly reject the war crimes charge," he added. "Within the reality there, the (military) did everything to be reasonable."
The 72-year-old Arafat -- confined with several dozen aides to a few fetid rooms since March 29, when Israeli tanks punched through the perimeter wall of his compound in the West Bank town of Ramallah -- emerged at midmorning, steadied by his men and blinking in the bright spring sunshine. A waiting crowd erupted in cries of "Allahu Akbar!" -- "God is great!"
During the weeks the Palestinian leader spent under effective house arrest, Israeli troops and armor launched the biggest military operation in the West Bank since the 1967 Middle East War, taking over more than half a dozen Palestinian cities, towns and refugee camps in what Sharon described as a concerted effort to smash a Palestinian terrorist infrastructure.
In the weeks leading up to Israel's offensive, Israelis had endured an unprecedented wave of suicide bombings, culminating in a March 27 blast at a Passover seder that killed 28 people, the worst single attack in 19 months of conflict.
Arafat is theoretically free to travel abroad for the first time in months, and aides are saying they expect him to leave in the next few days on a visit to Arab countries. But Sharon issued a blunt warning that Arafat might not be able to return if attacks on Israelis resume.
"If there will be a wave of terror, and if he'll be going around the world inciting, then we have to consider and discuss what to do," the Israeli leader told ABC's "Nightline," adding that he had given no guarantees Arafat would be allowed to come back.
At the same time, Sharon is coming under pressure by some of his Cabinet ministers to change course and resume talks with the Palestinians, even though only weeks ago the Cabinet branded Arafat an enemy of Israel. Sharon will visit the White House next week, where he is expected to receive a similar message from President Bush.
Israel first imposed restrictions on Arafat in early December, when it destroyed his helicopters in airstrikes, effectively grounding him in Ramallah in an attempt to pressure him to rein in Palestinian militants and prevent attacks on Israelis. The blockade was gradually tightened, with tanks deployed outside his headquarters in January.
During Arafat's confinement, Sharon offered to free him if he went into permanent exile. Arafat declared he would sooner die a martyr.
Upon emerging from his headquarters, Arafat climbed into a dust-covered black Mercedes for a whirlwind tour of Ramallah sites most strongly associated with the Israeli incursion -- hospitals, flower-strewn graves, the damaged Education Ministry, a cultural center run by the Palestinians' national poet, Mahmoud Darwish.
He blew kisses through the car window and flashed V-for-victory signs at crowds that grew at every stop as word of his release spread.
"I am so proud of him for surviving this," said Norma Haweed, 65, a former librarian. "We will rebuild everything, and find a way to look for peace."
Despite the festive mood during the tour of Ramallah, the West Bank's unofficial capital and its commercial hub, Arafat initially broke his isolation with an outburst of pre-dawn fury over events at the Church of the Nativity compound, where a fire had just erupted.
Speaking to reporters who entered his headquarters just after Israeli troops left, the Palestinian leader pounded his fist angrily on the table, calling Israelis "terrorists, Nazis and racists" and accusing them of willfully damaging the site, the traditional birthplace of Christ. In response, White House spokesman Ari Fleischer urged all the parties to "ask themselves what can they do to bring peace to the region, not what can they do to speak ill of others."
The Palestinians said the fire in the church complex was sparked by Israeli flares shot into it during fighting. Israel initially accused the Palestinians of arson, and an Israeli army spokesman, Lt. Col. Olivier Rafowicz, said Palestinians had booby-trapped doors in the compound.
However, Col. Miri Eisin of Israel's military intelligence later said Israel was checking whether the flares did indeed spark the flames.
The Franciscan press office in Rome said the parish hall and offices of the Franciscan monastery inside the church compound were destroyed by the fire. In a statement, the Franciscans, a Roman Catholic order, held Israelis and Palestinians equally responsible for "this continuing, intolerable and increasingly dangerous situation."
Driving home the continuing volatility of the monthlong standoff, Israeli troops opened fire Thursday on three armed Palestinians emerging from the church, killing one. The other two, wounded, managed to stagger back inside, and Palestinians returned fire.
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