Sharon says al Qaeda operating in Gaza, Lebanon

Israeli Prime Minister Ariel Sharon said yesterday Osama bin Laden's al Qaeda network had established a presence in Palestinian-ruled areas of the Gaza Strip and in Lebanon.

A Palestinian official denied the charge and said Israel was looking for an excuse to invade Gaza, where it often launches raids to hunt militants fighting for independence. In Lebanon, an official of the Hizbollah guerrillas declined comment.

Sharon also said he did not necessarily agree to a US-backed call for a Palestinian state by 2005 and officials said he had approved plans to extend a security fence to prevent Palestinian attacks.

Sharon spoke about al Qaeda a week after suicide bombers killed 10 Kenyans and three Israelis at an Israeli-owned hotel in the Kenyan resort of Mombasa and missiles narrowly missed an Israeli airliner taking off nearby.

He told a meeting with news media editors that Israel was "undoubtedly a target for attacks" by al Qaeda, a multinational, fundamentalist Muslim group which Israeli officials have blamed for the Kenya attacks.

"We have information about the presence of a few of them (al Qaeda members) now in the Gaza Strip," Sharon said. "We know they are in Lebanon and cooperating closely with Hizbollah." But he gave no details.

Rashid Abu Shbak, chief of Palestinian Preventive Security in Gaza, dismissed Sharon's charges and said Israel knew there were no al Qaeda operatives or cells in the small strip of land Israel occupied in the 1967 Middle East war.

An official with the Hizbollah guerilla group in Lebanon refused comment. Hizbollah, a Syrian- and Iranian-backed Shi'ite Muslim organisation, fought Israel's 22-year occupation of south Lebanon which ended in 2000. Last month, Hizbollah urged Palestinians to carry out more suicide attacks.

Violence in the more than two-year-old revolt has surged in recent weeks, despite calls by the United States for calm in the region as it seeks Arab support for a possible war on Iraq.

Commenting on US peace efforts, Sharon said his acceptance in principle of President George W. Bush's peace outline did not mean he had agreed to a Palestinian state by 2005.

"Implementation on the ground, not a calendar timetable, will be the determining factor," Sharon said about a 2005 target date, setting one campaign theme for his right-wing Likud party in Israel's January 28 general election.

Sharon said on Wednesday he would be open to the creation of a Palestinian state in parts of the West Bank and Gaza Strip.

The proposal Bush made in June calls for Palestinian reforms leading to eventual creation of a state. It has evolved into a "roadmap" backed by the United States, European Union, United Nations and Russia calling for full statehood by 2005.

At least 1,694 Palestinians and 668 Israelis have been killed since the uprising began in September 2000.

Israel and the United States have said they believe al Qaeda carried out the attacks in Kenya. Sharon has ordered Israel's Mossad intelligence agency to hunt down those responsible.

To try to stop Palestinian attacks in Israel, Sharon has approved plans to seal off its north from the West Bank by extending a security fence, government officials said.