Yasser Arafat has brushed off a call by US President George W Bush for the Palestinians to find a new leader, saying it is up to the Palestinian people alone to choose.

Insisting that he himself had been democratically elected, Mr Arafat pledged to pursue reforms and to hold elections early next year.

BBC correspondents say Mr Arafat is trying to put a brave face on Mr Bush's remarks, which he made in his long-awaited policy speech on the Middle East.

Click here to read full speech

When the Palestinians have new leaders, institutions and security arrangements, the US will support the creation of a Palestinian state

George W Bush

The speech appears to have endorsed the tough line of the Israeli Government, which sent tanks into the West Bank town of Hebron shortly afterwards.

For Prime Minister Ariel Sharon it is a political victory on a scale he could not have imagined, the BBC's Jeremy Cooke writes.

It is now clear that Mr Bush shares Mr Sharon's view that the Palestinian leader is irrelevant and must be replaced in order for there to be political progress, our correspondent says.

But, he adds, in attacking Mr Arafat, the US president risks damaging the chances of alternative leaders as ordinary Palestinians may view them as puppets of Israel and the US.

'New and different'

Mr Arafat has been trying to emphasise the positive for Palestinians in George Bush's speech, says another of our correspondents.

Asked if the US president - who had not referred to him by name - was calling for his removal, he replied "definitely not".

He also welcomed Mr Bush's call for an end to the Israeli occupation of the Palestinian territories.

Israeli tanks are re-occupying West Bank cities

In his speech, Me Bush said that peace required a "new and different Palestinian leadership" which could lead the Palestinians to their own state.

"If Palestinians embrace democracy, confront corruption, and firmly reject terror, they can count on America's support for creation of a provisional state of Palestine," he said.

Officials in Washington suggested a provisional Palestinian state could be established in 18 months and then made permanent in about three years.

The future borders of the Palestinian entity and "certain aspects of its sovereignty" would be provisional until resolved as part of a final settlement in the Middle East.

Hebron

Hebron is the seventh of the West Bank's eight major towns to be taken by the Israelis, with only Jericho remaining. The new crackdown was launched in the wake of suicide attacks on Jerusalem which killed 26 Israelis.

Palestinian sources said four policemen were killed when the tanks moved in early on Tuesday.

Putting Hebron under curfew, the Israeli army reported 150 arrests in the town and the discovery of a "bomb factory" including explosive belts to be used in suicide attacks.

In the Gaza Strip, Israeli soldiers shot dead a Palestinian they said was throwing grenades at their position.

But Mr Sharon stressed on Tuesday that ground operations would be confined to the West Bank, saying there was no need to "recapture" Gaza.