Israeli Prime Minister Ariel Sharon has welcomed President Bush's harsh criticism of Palestinian leader Yasser Arafat and called for American sanctions against armed Palestinian groups.

Cabinet Secretary Gideon Saar says Prime Minister Sharon is pleased with Mr. Bush's comments expressing disappointment in Mr. Arafat, and that the Palestinian leader should be doing more to halt violence.

Mr. Saar says that Mr. Sharon will ask the White House to continue applying pressure on Mr. Arafat and to impose sanctions, including placing some Palestinian groups on the State Department's list of international terror organisations.

The Israeli army has confined Mr. Arafat to his headquarters in the West Bank City of Ramallah since December.

He has called on all Palestinian factions to halt their attacks against the Jewish State, saying they are not in the Palestinian national cause. At the same time, Mr. Arafat says that the world should understand his people are living under Israeli military occupation and this gives them the right to fight for their independence. "This is occupation," he said. "We are the only people under occupation all over the world now. Can this be accepted internationally?"

Israeli officials, speaking on condition of anonymity, say that the U.S. administration is poised to declare the al-Aqsa Brigades of Mr. Arafat's Fatah faction as a terrorist group.

Mr. Saar says that Mr. Sharon will also ask Mr. Bush to designate as a terrorist organisation, Mr. Arafat's Force 17 presidential guard, which protects the Palestinian leader.

Mr. Sharon is due to raise the issue when he meets with Mr. Bush at the White House on February 7.