HIGHLIGHTSBush Invites Sharon to Washington.
British or US Jailers to Guard Zivi Assassins.
Arafat Has Paid a Price For Not Handing Over Suspects-Dahlan.
Talks on Siege at Church of Nativity at Crucial Stage.

STORYIsrael's cabinet approved on Sunday a proposal by President Bush that could lead to the lifting of a month-old Israeli siege on Palestinian leader Yasser Arafat, Israeli political sources said. (Read photo caption within).

Under the Bush plan to free Arafat, U.S. or British jailers would guard four militants convicted Thursday by an ad hoc Palestinian military court for their part in the October 17 killing of ultra-nationalist Israeli minister Rehavam Zeevi.

Israel had demanded their extradition and that of an official accused of smuggling arms for the Palestinian Authority as a condition for removing its tanks from Arafat's battered compound in the West Bank city of Ramallah.

The political sources said the president had invited Sharon to Washington next week for talks.

Mohammed Dahlan, a Palestinian security chief, called the cabinet decision a retraction in the Israeli position.

"It will be presented to President Arafat who will take a decision," he told Reuters. "We have vetoed any attempt to hand over these people and President Arafat has paid a price for that rejection by the existing blockade against him."

THE LAST TALKS?

Israeli and Palestinian negotiators meanwhile resumed talks Sunday designed to end a 25-day-old armed stand-off between Israeli occupation soldiers and Palestinian Resistance men holed up inside the church of Nativity.

"Either there will be real progress and a breakthrough or these will be the last talks," Hanna Nasser, a Palestinian negotiator and the mayor of Bethlehem, told reporters.

Previous talks have failed to resolve the impasse. Israel has vowed to keep up its siege until wanted militants inside the church surrender for trial or exile. Palestinians have proposed the militants be sent to Gaza.

PHOTO CAPTION

Israeli army vehicles move inside the Palestinian President Yasser Arafat's compound in the West Bank City of Ramallah, April 28, 2002. Israel's cabinet approved on Sunday a proposal by U.S. President George W. Bush that could lead to the lifting of a month-old Israeli siege on Palestinian leader Yasser Arafat, Israeli political sources said. REUTERS/Osama Silwadi
- Apr 28 11:48 AM ET