Washington ? The State Department is set to trim the U.S. diplomatic presence in Jerusalem in response to terror attacks against Israel, two U.S. officials said Tuesday.

American diplomats and other U.S. workers at the consulate whose jobs are not considered essential will be offered free transportation home, along with all dependents, said the officials, speaking on condition of anonymity.

The United States, declining to recognize Jerusalem as Israel’s capital, maintains its embassy in Tel Aviv. The authorized departure, as it is called, does not apply to the embassy, the officials said.

Jerusalem has been a frequent target of Palestinian suicide bombers. Tel Aviv also has suffered bloody attacks, but with less frequency.

The authorized departure from the Jerusalem consulate is in response to a generally uncertain situation and not to any specific threat directed at Americans, one of the officials told The Associated Press.

There was no immediate word on how many Americans could be quitting Israel in a move that is likely to contribute to the anxieties of travelers who are inclined to steer clear of Israel during its struggle with terrorism.

An announcement expected late Tuesday also will renew a warning to Americans not to travel to Israel. It was first issued Jan. 7, citing ongoing violence and potential for terrorist acts.

The Bush administration is not branding Palestinian leader Yasser Arafat a terrorist because there is more he can do to further the Mideast peace process, Secretary of State Colin Powell said earlier Tuesday.

“There are terrorist activities, we see them every day,” Powell said, referring to suicide bombings in Israel. “But Chairman Arafat is the head of the Palestinian Authority, an organization we help create,” and has been working within the process.

“We still believe there is more he can do and we are asking him to do more and it would not serve our purpose right now to brand him individually as a terrorist,” Powell said on CBS’ “The Early Show.”

Hours after Israeli Prime Minister Ariel Sharon suggested that Arafat be exiled, Powell said on ABC’s “Good Morning America”: “Sending him into exile will just give him another place from which to conduct the same kind of activities. Until he decides he’s going to leave the country, it seems we need to work with him where he is.”

Powell’s treatment of Arafat was more restrained than the rhetoric President Bush directed against the Palestinian leader Monday.

“There will never be peace so long as there is terror, and all of us must fight terror,” Bush said. “I’d like to see Chairman Arafat denounce the terrorist activities that are taking place, the constant attacks.”

Meanwhile, the State Department appealed to Israel to “carefully consider the consequences” of its military thrust into the West Bank city of Ramallah, where Arafat is trapped inside his Palestinian Liberation Organization headquarters.

And Defense Secretary Donald H. Rumsfeld linked Iran, Iraq and Syria to the terror attacks on Israel, accusing the three nations of “inspiring and financing a culture of political murder and suicide bombing.”

Without venturing a judgment on Israel’s method of retaliation, Rumsfeld suggested the United States would take stern measures under similar circumstances.

“When the United States is hit by terrorist attacks, you have a choice. You can say, ‘Gee, that’s too bad,’ or you can go try to find the terrorists and do something about it,” Rumsfeld said.

The overall aim was to register U.S. resolve against terrorists who have subjected Israel to the deadliest series of bombings in its difficult 54-year history.

Bush appealed to Arafat to order an end to the assaults on Israel and on settlers and soldiers on the West Bank. Suicide bombing in the name of religion is nothing but terror, he said.

“There will never be peace so long as there is terror, and all of us must fight terror,” Bush said. “I’d like to see Chairman Arafat denounce the terrorist activities that are taking place, the constant attacks.”

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