Israel is reserving the right to respond militarily against Hamas if the Palestinian Authority fails to take action in response to Tuesday's suicide bombing in Jerusalem that killed at least 20 people. Israeli Prime Minister Ariel Sharon met with his top security officials.
Mr. Sharon and his defense Minister, Shaul Mofaz, decided to hold off on a military response to Tuesday's deadly bus attack, in order to give the Palestinian Authority more time to launch a crackdown against militant Islamic groups.
Israel said it will intensify a hunt for wanted militants if the Palestinian security forces do not take action.
Israeli officials made it clear that a major military strike against terrorist groups, similar to those launched last year in response to suicide bombings, is not being considered at this time.
Israeli officials also ruled out, for now, sending Palestinian President Yasser Arafat into exile and taking over his headquarters in the West Bank city of Ramallah.
The Israeli government blames Mr. Arafat for orchestrating much of the violence during the past three years and has cut off all direct contacts with the Palestinian leader.
In the wake of the latest suicide bombing, Israel has also frozen contacts with all officials in the Palestinian Authority and suspended plans for the handover of four West Bank towns to Palestinian security control.
Israel has also imposed a general closure on the West Bank and Gaza Strip.
Meanwhile, Palestinian Prime Minister Mahmoud Abbas convened an emergency meeting of his cabinet to discuss a Palestinian response to the suicide bombing.
Since taking up his appointment earlier this year, Mr. Abbas has repeatedly refused appeals for Palestinian security forces to crackdown on armed Palestinian groups. He warned this could provoke a civil war within Palestinian society.
But in the wake of Tuesday's suicide bombing, he is facing growing international pressure to arrest militants who are behind such attacks.