DATE= 3/31/02

TYPE=CORRESPONDENT REPORT -

TITLE=ISRAEL / ARAFAT (S)

NUMBER=2-288176

BYLINE=LAURIE KASSMAN

DATELINE= JERUSALEM

CONTENT=

INTRO: Israel's military has issued a statement denying Palestinian reports that soldiers have breached the offices where Palestinian leader Yasser Arafat has been under siege since Friday morning. V-O-A's Laurie Kassman reports from Jerusalem there has a heavy exchange of gunfire in and around the compound early Sunday morning.

TEXT: From the confines of Mr. Arafat's office, a Palestinian spokesman told Arab T-V the soldiers had entered the wing of the building near Mr. Arafat's offices.

A spokesman for Israel's defense forces says the claim that soldiers had entered the Palestinian leaders' office is unfounded. But he does confirm an exchange of gunfire in the area.

Foreign Minister Shimon Peres has told Israel Radio that Israel has said it would not harm Mr. Arafat and, he added, that decision still stands.

Prime Minister Ariel Sharon had ordered the assault on Mr. Arafat's compound Friday in order to isolate him. A larger military operation, he said, aims to destroy terrorist networks.

Israeli troops in Ramallah have been rounding up Palestinian men for questioning. Officials also suspect several Palestinians wanted by Israel may be hiding in Mr. Arafat's offices.

Israel's military campaign comes after a series of attacks against Israelis that killed more than 30 people in the past four days, including a suicide bombing in Tel Aviv Saturday night. (Signed)

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