Israeli army snipers took up positions Tuesday overlooking Palestinian leader Yasser Arafat's West Bank headquarters. But there are indications some wanted militants might have escaped from the compound anyway.

Palestinian officials say Israeli sharpshooters were seen taking over several buildings with clear views of Mr. Arafat's offices in the West Bank city of Ramallah.

The Palestinian leader's offices are in the one building still standing amid the rubble of his headquarters, largely demolished during a 10-day Israeli army siege.

The soldiers pulled out of the compound Sunday, following intense pressure from the United States.

But the troops were ordered to remain in the area, in a bid to capture wanted Palestinian militants that Israel says have taken refuge in Mr. Arafat's offices.

Israeli media report that some of the Palestinians Israel wants to arrest might have sneaked out during the troop pullback on Sunday.

The Hebrew daily newspaper Ma'ariv says the Israeli Prime Minister, Ariel Sharon telephoned his Defense Minister, Binyamin Ben-Eliezer, to berate him for letting any militants escape.

Meanwhile, Palestinian officials have criticized a new U.S. law, signed by President Bush on Monday, that formally recognizes Jerusalem as Israel's capital. U-S officials say the law will not have any practical impact, but Palestinian officials call it an insult, and even an incitement, and say it will hurt efforts to bring peace to the Middle East.

The American embassy to Israel is in Tel Aviv. The Palestinian Authority does not want Jerusalem recognized as Israel's capital until there is a Palestinian state with its capital also in Jerusalem.