Israel has withdrawn its forces from Ramallah, saying its latest security operation there is over.

Troops and tanks entered the West Bank town on Monday, setting up positions around Palestinian leader Yasser Arafat's headquarters.

They withdrew on Wednesday night as Israeli Prime Minister Ariel Sharon held talks with his British counterpart, Tony Blair, in London.

Troops say they found bombs

But shortly after the Ramallah withdrawal, the military mounted a new search operation in the Palestinian village of Tubas, near Jenin.

Mr Arafat called the first meeting of his cabinet since a weekend reshuffle shortly after the withdrawal.

Israeli soldiers arrested about 50 Palestinians, uncovered a bomb laboratory and found two car bombs ready for use during the operation, the army said.

"The IDF [Israeli Defence Forces] never intended to stay in Ramallah," said Danny Shek, a spokesman for the Israeli foreign ministry.

"Once the operation was finished the troops withdrew and hopefully the Palestinian organisations will give us no reason to return."

As the troops pulled back, Palestinian police and security officers ran into Mr Arafat's compound and shouted slogans in support of their leader.

New raid

Two Israelis and three Palestinians were wounded in the operation in the village of Tubas as the Israelis stormed a security building, which resulted in 15 arrests.

The army also reported that three soldiers were wounded in the Gaza Strip, when what was presumably a mortar bomb hit the Gush Katif Jewish settlement.

Palestinian medical sources said five Palestinians were wounded in the ensuing gunfire.

Elsewhere, Israeli security forces in the Bethlehem area arrested two Palestinians, a woman and a 15-year-old girl, on suspicion of planning suicide attacks.

Sharon back

Mr Sharon has returned to Israel after his talks in Washington and London, where he blamed Mr Arafat for the continuing violence and said that peace talks could not take place until the bloodshed ended.

US Secretary of State Colin Powell said on Wednesday that President George W Bush favoured a "temporary" Palestinian state, even before its final status was determined.

The secretary of state also told the London-based Arab newspaper Al-Hayat he would chair a Middle East peace summit this summer.

But the White House later played down Mr Powell's statements, saying the president had not endorsed a transitional Palestinian state.

And, after meeting Mr Sharon, President Bush said the time was not ripe for a regional peace conference.