Israel continues to search for suspected militants

Troops will remain deployed in the sector, the ministry said, and Palestinian leader Yasser Arafat will not be allowed to attend Orthodox Christian celebrations on 6 January unless he arrests the killers of Israeli cabinet minister, Rehavam Zeevi.

Despite widespread international criticism, the Israelis also prevented Mr Arafat, from going to Bethlehem - the birthplace of Christ - for Christmas Eve celebrations on Monday.

Meanwhile, the Palestinian Authority accused Israel of trying to sabotage its ceasefire efforts, after Israeli troops seized eight suspected Palestinian militants during an incursion into the West Bank town of Hebron early on Thursday.

The Israeli army said the eight men were members of the radical Islamic group Hamas, while the Palestinians said the detainees were students.

The raid was the second in two days.

'No talks'

Palestinian Authority General Secretary, Ahmed Abdul-Rahman said the decision to keep the ban on Mr Arafat travelling to Bethlehem could thwart efforts to restore calm.

Even though we are seeing a drop in terror attacks, the Palestinian Authority still has a long way to go

Prime Minister Ariel Sharon

Since the town came under Palestinian rule in 1995, Mr Arafat has attended both the Western Christmas Eve Mass and the Greek Orthodox Christmas on 6 January.

But since early December, he has been prevented from leaving the West Bank town of Ramallah by Israeli forces.

Israel says the Palestinian leader has not done enough to rein in the militant groups behind suicide attacks against Israeli citizens.

On Thursday, Israel's Prime Minister Ariel Sharon said attacks against his country had lessened but stressed that any resumption of peace talks was still a long way off.

"Even though we are seeing a drop in terror attacks, the Palestinian Authority still has a long way to go", Mr Sharon said in a statement.

"There will be no diplomatic negotiations between Israel and the Palestinian Authority until the terror ends completely."

Mr Sharon's comments were seen as a reference to his Foreign Minister Shimon Peres who has been holding talks with the Palestinian Parliament Speaker Ahmed Queira about the framework for a possible peace deal.

"When the day comes for peace talks, I will run them," Mr Sharon said.