Ariel Sharon says the new Israeli Government that he has been asked to form will end "Palestinian terrorism" and remove its "leader", Yasser Arafat.

Mr Sharon was formally invited on Sunday by the Israeli President, Moshe Katsav, to begin putting together a new administration after winning last months election.

The new government will face difficult tasks - the war against terrorism and against its leader, the head of the Palestinian Authority Ariel Sharon Israeli Prime Minister

"The new government will face difficult tasks - the war against terrorism and against its leader, the head of the Palestinian Authority," Mr Sharon said.

Mr Sharon's Likud party won the most seats in January's elections following a campaign in which he pledged to continue his hardline stance against Palestinians.

Yet as Mr Sharon made his threats against Mr Arafat, it was confirmed that the Israeli leader had last week held his first talks in nearly a year with senior Palestinians.

Pull-out plans

He met Palestinian parliament speaker Ahmed Korei, also known as Abu Ala, on Wednesday, officials on both sides have confirmed.

Mr Sharon offered an Israeli pull-out from Palestinian areas where militants are being reined in by Palestinian sources, one unnamed Israeli official told the Associated Press news agency.

Israeli media said that Mr Sharon's chief of staff Dov Weisglass and the US Ambassador to Israel, Daniel Kurtzer, took part in Wednesday's talks at the Israeli prime minister's ranch in the southern Negev desert.

The meeting lasted less than two hours and correspondents say it shows Mr Sharon is trying hard to win over the Labour party, which favours dialogue with the Palestinians to end the continuing violence.

Mr Weisglass is expected to meet Palestinian Interior Minister Hani-al-Hassan on Monday, according to Palestinian officials quoted by AFP news agency.

Jihad attack

Since first coming to power two years ago, Mr Sharon has resolutely refused to meet Mr Arafat.

Sunday's attack stresses the urgency of ending violence

On Sunday, he again accused Mr Arafat of being behind attacks on Israeli targets and called for his removal.

Mr Arafat has always denied involvement in anti-Israeli attacks, saying that Israeli aggression and killings in the Palestinian territories have encouraged young militants.

In a latest attack, three Palestinians targeted an Israeli army post in the southern Gaza Strip.

Their car approached a checkpoint, swerved off the road and drove towards the post. They hit a concrete wall protecting the post and blew up.

The militant group Islamic Jihad says it carried out the attack.

The Israeli army maintains a strong presence at scene of the attack, a junction where a road bridge reserved for Jewish settlers passes over the main Palestinian road.

The main north-south road through Gaza was immediately closed while the Israeli army conducted searches making travel from north to south impossible for Palestinians.

Coalition talks

Dovish Mitzna won't share power with Likud

Mr Sharon's Likud party won most seats in the elections on 28 February - but it is short of an overall majority.

The prime minister has said he would prefer a national unity government with the centre-left Labour party.

But Labour leader Amram Mitzna has refused to take part unless Mr Sharon agrees to begin evacuating Jewish settlements and make fundamental changes to the state budget.

Mr Sharon's other option is a coalition with right-wing and religious parties.

He issued a thinly-veiled appeal to Labour on Sunday evening.

"No-one can escape the obligation to give up on immediate and petty political interests in favour of national interest," he said.

"Whoever wants peace must join the government or bear responsibility."