Top Israeli officials are considering how to respond to a devastating Palestinian suicide bombing that left at least 21 people dead and injured more than 100.
Israeli Prime Minister Ariel Sharon is consulting with Defense Minister Binyamin Ben-Eliezer and top military officials as the Jewish state decides on its response to one of the deadliest Palestinian attacks during 18 months of conflict.
Several Israeli cabinet ministers are calling for massive retaliation, including ousting Palestinian leader Yasser Arafat, toppling his government and reconquering large parts of the West Bank and Gaza Strip.
Such a large-scale military operation could completely derail current efforts by U.S. Middle East envoy Anthony Zinni to broker a cease-fire.
The Palestinian Authority, which condemned the bombing, ordered employees to evacuate their offices in the West Bank city of Ramallah in anticipation of possible Israeli military retaliation. Many schools were ordered to close and students were told to return home.
Mr. Arafat met with his security chiefs and ordered the arrests of key militants from Hamas, Islamic Jihad, and the Al Aqsa Martyrs Brigades, all groups that have carried out frequent attacks.
Palestinian officials say Mr. Arafat is concerned about his personal safety, although in the past Israeli leaders have said they will not harm the Palestinian chairman.
Israeli government spokesman Raanan Gissin says the government will continue to support Mr. Zinni's efforts to negotiate a truce, but will take "all necessary measures" to defend its people.
"We will continue to pursue the cease-fire. We want to establish a cease-fire," he said. "We want to bring an end to this wave of terrorist activity that is taking the life of our men, women, and children, innocent people, almost every day. But, at the same time, when we will feel that we have exhausted all the possibilities of achieving such a cease-fire, then of course we will take all the necessary measures in order to defend our citizens."
Israeli officials are calling the suicide attack at a seaside hotel in the coastal city of Netanya a "Passover massacre."
About 250 people were sitting down for a ritual meal ushering in the Passover holiday when the bomber entered the hotel's dining room and exploded his charges. Passover celebrates the Jews deliverance from slavery in ancient Egypt.
About 50 Palestinian suicide bombers have blown themselves up since the uprising against Israeli occupation began in September 2000.