No degree of oppression and no level of desperation can ever justify the killing of innocent civilians

Yasser Arafat

The prime minister was speaking at a meeting of the cabinet in which he briefed ministers on secret talks he held last week at his Jerusalem residence with three senior Palestinian officials - the first such contact since he came to power.

Israeli helicopters later fired missiles at what the Israeli army suspected was a Palestinian mortar bomb factory in the Gaza Strip. The building, a metal workshop in Jabalya, was badly damaged, although nobody was reported injured.

Call for talks

Mr Sharon's comments came as Palestinian leader Yasser Arafat condemned Palestinian militant groups who attacked Israeli civilians as "terrorist organisations".

In a New York Times article published on Sunday, Mr Arafat said: "I condemn the attacks carried out by terrorist groups against Israeli civilians.

"These groups do not represent the Palestinian people or their legitimate aspirations for freedom. They are terrorist organisations".

Correspondents said Mr Arafat's article was timed to precede talks on Thursday in Washington between Mr Sharon and US President George W Bush.

[Arafat] is excellent when it comes to talking

Ariel Sharon

"No degree of oppression and no level of desperation can ever justify the killing of innocent civilians," Mr Arafat's article said.

Mr Arafat said he was ready to sit down with any Israeli leader to negotiate "freedom for the Palestinians, a complete end of the occupation, security for Israel and creative solutions to the plight of the [Palestinian] refugees while respecting Israel's demographic concerns".

Israeli Foreign Minister Shimon Peres, in New York for the World Economic Forum, welcomed Mr Arafat's remarks as a "good beginning", but urged the Palestinian leader to back up his words with deeds.

"If Arafat will do what he has said, it is a good beginning," Mr Peres said.

But Mr Sharon once again branded Mr Arafat's comments as "irrelevant".

"He talks incessantly. Certainly the comments were written in softer language, but he is excellent when it comes to talking," Mr Sharon told Israel's Channel Two television.

Cabinet divided

The Israeli prime minister has come under fire from politicians on the right for agreeing to meet the Palestinian officials, despite his vow not to negotiate until there was an end to the violence.

Mr Sharon said Israel would not negotiate peace under fire

But the Israeli leader said the talks with Palestinian parliamentary speaker Ahmed Korei, Mr Arafat's unofficial deputy, Mahmoud Abbas and a senior Palestinian economic adviser, Khaled Salam, had not been political, but rather dealt with ceasefire efforts.

The Palestinians said Mr Sharon had nothing new to say or to offer.

Mr Sharon's spokesman, Raanan Gissin, told the BBC that the Israeli leader had repeated Israel's demand for a complete ceasefire before any political talks could begin.

But he also told them Israel did not want to bring about the collapse of the Palestinian Authority.

Arafat has come under pressure from all sides

"I thought it would be good that they hear directly from me, and I also wanted to hear their positions," Mr Sharon told his cabinet, the Associated Press news agency reported.

The Justice Minister, Meir Sheetrit, said he hoped the talks were a sign of a new relationship.

But Tourism Minister Benny Elon threatened to pull his far-right Moledet party out of the government in protest.

Militants shun Arafat

Mr Arafat has been under enormous pressure not only from the United States and Israel, but also from within his own organisation.

The radical Popular Front for the Liberation of Palestine (PFLP) said on Saturday that there can be no Palestinian unity while its leader Ahmad Saadat remained in jail.

A spokesman of the PFLP, the second largest group in Mr Arafat's Palestine Liberation Organisation, told a news conference in the West Bank city of Ramallah that the group would no longer take part in top-level meetings of the Palestinian leadership.

The Palestinian Authority arrested the PFLP leader last month following intense pressure from Israel, which blames Mr Saadat for the assassination of Israeli Tourism Minister Rehavam Zeevi last October.