HEBRON, West Bank ? Israeli forces took over this West Bank city early Monday, killing nine Palestinians, just hours after Israel’s Cabinet reluctantly agreed to a U.S. proposal to release Palestinian leader Yasser Arafat from his monthlong confinement and allow him to travel freely.

Israel said Arafat was now free to leave his headquarters in the West Bank town of Ramallah. However, Israeli tanks continued to surround Arafat’s compound Monday, and Palestinian officials said Israel told them Arafat could only travel once six wanted Palestinians had been moved from his headquarters to a prison in the town of Jericho. The prisoner transfer was expected in a day or two, they said.

Israel gave its consent to ending Arafat’s confinement with the understanding that the United States, in turn, would stand by Israel’s side in an increasingly tense showdown with the United Nations over a fact-finding mission to the Jenin refugee camp, government officials said.

At another flashpoint, the Church of the Nativity in Bethlehem, a Palestinian militiaman was killed by Israeli sniper fire Monday when he walked into a courtyard, the army said. Three monks later carried the body out of the compound. The church, built over Jesus’ traditional birth grotto, has been under Israeli siege for a month, with more than 200 armed Palestinians holed up inside.

In Washington, a U.S. official said an end to the Bethlehem standoff might be imminent, but provided no details. An Israeli diplomat said the emerging deal would give wanted gunmen a choice of exile or prosecution by Israel. However, Palestinian negotiators insisted Tuesday that exile or trial were not an option.

“We are sticking to our stand that there will be no exiling of anyone outside his country,” Salah Taameri said. “We have one position, which is that the people wanted by Israel should go to Gaza without being detained or placed under Israeli investigation. And if there are any accusations against them, the Palestinian Authority will investigate them and then make the appropriate decisions.”

Israeli forces entered the West Bank city of Hebron at about 4:30 a.m., with tanks and armored personnel carriers driving in from all directions.

Nine Palestinians, including six civilians, were killed by Israeli fire, Palestinian witnesses said. In the bloodiest incident, a missile fired from an Israeli helicopter hit a one-story house, killing a gunman and four civilians. Two more civilians who rushed to the scene to try to help were killed by helicopter fire, witnesses said.

In downtown Hebron, Israeli troops lined up dozens of Palestinian men against a wall, handcuffing and blindfolding them. Several of the men knelt on the pavement, as Israeli troops stood guard. In previous incursions, Israel detained large numbers of people for questioning, and released most after several days.

Israeli Defense Minister Binyamin Ben-Eliezer said troops arrested 17 Palestinians in Hebron, including several high on Israel’s wanted list, and found two suitcases filled with explosives, as well as a car bomb ready for detonation.

Ben-Eliezer said troops wouldn’t stay long. “We went there to hit that infrastructure (of terror groups) and to get out quickly,” he said.

The defense minister said he expected to pull troops out of Ramallah within a few days, once the six wanted men had been moved, and hoped the Bethlehem standoff would be resolved soon. “We are in the last stage of the entire operation,” Ben-Eliezer said.

The Hebron incursion came in retaliation for a weekend attack on the nearby Jewish settlement of Adora, in which four Israelis, including a 5-year-old girl, were killed. Hamas claimed responsibility for that attack.

Arafat’s monthlong confinement drew to a close after Israel on Sunday agreed to a U.S.-proposed arrangement for the six wanted men inside the compound the four assassins of Israeli Cabinet Minister Rehavam Zeevi, the leader of the four men’s political faction and an Arafat aide suspected of arms smuggling.

Under the plan, the six would be transferred to Jericho, where their imprisonment would be supervised by U.S. and British officials, said Palestinian Information Minister Yasser Abed Rabbo. The minister said the six would be moved from Ramallah to Jericho in the next 48 hours.

Arafat adviser Nabil Abu Rdeneh said the Palestinians were informed by Israel that the Palestinian leader could leave the compound once the prisoners had been taken to their new lockup.

British and U.S. experts were to meet Arafat later Monday to arrange moving the prisoners. A senior Palestinian official said the United States raised concern about last week’s trial in which the four Zeevi killers were sentenced to prison terms ranging from one to 18 years by a makeshift court in Arafat’s compound. The United States wants the trial to be held again, under different circumstances, said the official, who spoke on condition of anonymity.

Israeli and Palestinian officials said Arafat would be able to move freely in the West Bank and Gaza Strip and to travel abroad, something he has not been able to do since December when Israel first barred him from leaving Ramallah. His confinement to a few rooms in his headquarters began March 29, when Israel launched a major military offensive against Palestinian militias.

Israel’s agreement to release Arafat came after a series of phone calls this weekend between President Bush and Israeli Prime Minister Ariel Sharon, and after a stormy six-hour Cabinet meeting in which a first vote on Arafat’s fate ended in a tie. Sharon could have cast his decisive vote, but instead called a lunch recess and called Bush to report on his difficulties, the Haaretz daily said.

White House press secretary Ari Fleischer, said Bush was pleased with actions taken in resolving the Ramallah standoff, but that close monitoring is required.

“Nothing in the Middle East is easy,” he said. “Nothing stays as hopeful as you’d like it to be for long.”

The White House said a date of Sharon to visit Bush in the next two weeks.

A Bush-Arafat meeting, however, was not on the horizon. “He (Arafat) hasn’t earned my respect yet. He must earn my respect by leading,” Bush said.

Palestinian Cabinet Minister Saeb Erekat said Israel acted in bad faith by sending troops into Hebron. “The moment we accepted the American proposal (on Arafat’s confinement), we have an incursion into Hebron,” Erekat said. “Every time we show good will … Israel slaps us in the face.”

Israel’s deputy defense minister, Dalia Rabin-Pelossof, confirmed a link between Arafat’s release and U.S. assistance with Israel during its increasingly heated confrontation with the United Nations over the Jenin mission.

“I assume that … some sort of agreement was reached, some sort of deal, according to which Ariel Sharon gave up on his insistence that Arafat be isolated in his headquarters,” she said. “At this stage, we win U.S. backing concerning our reservations on the issue of the U.N. committee.”

Israel said it would not cooperate with a U.N. mission looking into a weeklong battle between Israeli troops and Palestinian gunmen at the Jenin camp unless demands for changes in the composition and mandate of the team were met.

“I think we have to disagree with the United Nations now, even at the cost of world opinion,” said Foreign Ministry official Gideon Meir, accusing the U.N. of an anti-Israel bias. “They want to set us up,” he said.

Israel in effect banned the team from arriving. Foreign Minister Shimon Peres told the head of the mission that its arrival would be delayed until there is agreement on the scope of its activities and its composition, Israeli officials said.

Israel charges that U.N. Secretary-General Kofi Annan went back on understandings with Israel over the mission. Israel wants the inquiry to concentrate on the Palestinian terror infrastructure in the camp and demands that team members have expertise in terrorism.

The Palestinians have accused Israel of carrying out a massacre in the camp, a charge vehemently denied by Israel, which says several dozen Palestinian were killed in a fierce battle, most of them gunmen.