Palestinian leader Yasser Arafat will not attend the Arab Summit in Beirut but he is expected to address the gathering via satellite from his headquarters in the West Bank town of Ramallah.
News of Mr. Arafat's decision not to travel to Beirut came late Tuesday only a few hours after Israeli Prime Minister Ariel Sharon told a TV interviewer the situation "was not ripe for lifting the travel ban on the Palestinian leader."
The news also followed yet another deadly attack, this time against international observers in the West Bank town of Hebron. Two members of an international observer force there died in an ambush on their vehicle.
A third member of the team who was injured in the attack told Israel Radio the assailant was wearing a Palestinian police uniform and carrying a Kalashnikov rifle. The Palestinians have called for an investigation.
Early Wednesday, Israel's military reported its forces had killed two Palestinians trying to cross into Israel from the Gaza Strip. Other sporadic incidents of violence have been reported in the area.
The violence has marred the start of the Jewish Passover holiday. Israeli security is on high alert amid warnings of more terrorist attacks.
U.S. peace envoy Anthony Zinni has been trying to calm tensions and end 18 months of bloodshed. Israel had reluctantly accepted a draft ceasefire plan but the Palestinians questioned several elements. This is Mr. Zinni's third attempt in five months to achieve a truce.
Israeli Prime Minister Sharon had conditioned letting Mr. Arafat travel to the Arab summit on the Palestinian leader's commitment to a cease-fire and a public call for an end to the violence.
Mr. Sharon also said the U.S. government should guarantee that Israel could prevent the Palestinian leader's return to the West Bank if there were terrorist attacks during his absence.
Mr. Arafat's top aides said he would not accept pre-conditions concerning his departure or return.
Still, he is expected to participate in the summit via a satellite hook-up from his Ramallah headquarters.
The Arab leaders are taking up a Saudi peace initiative that calls for normalizing relations between Israel and its Arab neighbors if Israel withdraws from all lands it seized in the 1967 Arab-Israeli war.