We might be having some progress once again

US Secretary of State Colin Powell

Four missiles were said to have been fired at the building. No casualties were reported.

The talks took place on Wednesday and lasted several hours, Israeli and Palestinian sources confirmed to the BBC.

Mr Sharon spoke at his home for several hours with Ahmed Korei, the Palestinian parliamentary speaker, Mahmoud Abbas, unofficial deputy to Palestinian leader Yasser Arafat, and a senior Palestinian economic adviser, Khaled Salam.

Israel radio reported that Mr Sharon would meet the three men again once he returned from a visit to Washington next week.

Separately, Israeli and Palestinian security officials met in Jerusalem on Friday, renewing talks that were put on hold a month ago amid an upsurge in violence.

Israel is under pressure to calm the conflict

US Secretary of State Colin Powell welcomed the news of both sets of talks.

"We might be having some progress once again," he said.

Mr Sharon has repeatedly said he will not negotiate with the Palestinian leadership until there is an end to the violence which has seen more than 1,000 die since the Palestinian intifada (uprising) against Israeli rule in the West Bank and Gaza began in September 2000.

But earlier this week, Mr Sharon told an Israeli newspaper that he did not reject meetings with Palestinian leaders as long as they were not Mr Arafat.

Arafat's successors?

Analysts said the talks could be aimed at opening a dialogue with moderate Palestinian as a way to bring pressure on Mr Arafat, who Israel last year branded "irrelevant".

A Palestinian official said Mr Sharon stressed during the talks that he would continue to put pressure on Mr Arafat until he reined in militants who carried out attacks on Israelis.

Arafat has been pinned down in Ramallah

But the officials said the Palestinian side was left with the impression that Mr Sharon wanted to open his own channel of dialogue with senior Palestinians whom he believed to be pragmatic.

Mr Korei, who has held a series of meetings with Israel's Foreign Minister Shimon Peres, was one of the three Palestine Liberation Organisation representatives who met secretly with Israelis in Norway ahead of the 1993 Oslo peace accords.

Mr Abbas signed the peace deal on behalf of the Palestinian Liberation Organisation.

Both men are seen as possible successors to Mr Arafat.

An Israeli Government source told the BBC's Barbara Plett that Israel was under pressure from Washington to come up with practical suggestions on how to calm the conflict.

But the source said he was sceptical anything concrete would develop.

Mr Sharon is due to hold talks with President Bush in Washington next week - their fourth meeting in a year.

Last month, the United States suspended a peace mission to the region led by retired General Anthony Zinni.

Arms shipment

President Bush has accused Mr Arafat of "enhancing terror" for his alleged links to a smuggled cargo of arms intercepted by Israel.

Mr Arafat's Palestinian Authority has denied involvement in the arms shipment but ordered an investigation into the affair, and the arrest of Palestinian officials implicated in it.

The latest talks come after Mr Sharon has taken a series of unprecedented steps against Mr Arafat, including confining him to his compound in the West Bank town of Ramallah after a wave of shootings and suicide bombings rocked Israel.

Palestinian officials have accused Mr Sharon of seeking to topple Mr Arafat and his Palestinian Authority as Israel attempts to quell the uprising.

Animosity between the sides was deepened by Mr Sharon's remark on Thursday that he regretted that Israel had not killed Mr Arafat in 1982 when its army invaded Lebanon.