Palestinian leader Yasser Arafat has emerged from his West Bank headquarters and toured the battle-scarred city of Ramallah, hours after Israeli troops withdrew from his compound, releasing him from months of confinement.
Greeted by a cheering crowd of hundreds of Palestinians, Yasser Arafat came out of his battered headquarters and flashed a V-for-victory sign. Aides steadied the Palestinian leader as he walked down a small flight of steps into a waiting limousine.
Mr. Arafat visited a local hospital and said prayers at a graveyard where Palestinians killed during the uprising against Israeli occupation are buried. He also toured Palestinian Authority buildings in Ramallah that were severely damaged during the Israeli military incursion into the city.
Israel has restricted Mr. Arafat's movements for the past five months and he has been confined to a few rooms in his headquarters since late March, when the military launched an offensive in the West Bank in response to Palestinian suicide attacks that killed dozens of Israelis.
The Palestinian leader was released from confinement under a U.S.-brokered deal that included the transfer of six wanted men in his compound to a prison in Jerico, where they are being monitored by American and British wardens.
Mr. Arafat says he is horrified by the damage caused during the recent Israeli offensive, and he denounced the "barbaric activities" of the Israeli army.
Meanwhile, Israeli snipers opened fire at Bethlehem's Church of the Nativity, killing at least one member of the Palestinian security services. Palestinians returned fire, sparking a shootout at one of Christianity's holiest shrines.
Hours earlier, part of the compound caught fire during another gun battle between Palestinians hiding in the basilica and Israeli troops deployed around the complex.
Israel and the Palestinians accused each other of starting the fire, which raged a short distance from the church, but did not damage it. Palestinians say Israeli flares fired during the fighting sparked the flames, while Israel accused the Palestinians holed up in the compound of arson.
Palestinian leader Yasser Arafat described the incident as "an ugly crime," and called on the international community to take immediate action to end the siege.
For the past month, Israeli soldiers have surrounded the church. About 200 Palestinians, including gunmen, Christian clerics and civilians, are inside.
The Church of the Nativity is built over the grotto where tradition says Jesus was born.