Jerusalem ? Yasser Arafat decided Tuesday not to attend a key Arab summit after Israel brushed aside appeals by the United States and threatened to prevent the Palestinian leader from returning home if violence flared during his absence. Arafat’s absence could undermine Arab support for a Saudi peace plan being presented in Beirut.

Despite calls by the United States that he let Arafat go to the summit, Israeli Prime Minister Ariel Sharon said “conditions are not ripe” to do so. He insisted the Palestinian leader call a cease-fire first and that Washington back any Israeli decision to bar Arafat from returning home if there is violence during his absence.

State Department spokesman Richard Boucher insisted Israel grant a “round trip” for Arafat to and from the summit, which opens today in the Lebanese capital.

Nevertheless, Arafat will address the Arab gathering. Palestinian Cabinet Secretary Ahmed Abdel Rahman said the Palestinian leader would speak to the summit via satellite today from his Ramallah headquarters.

Outside observers killed

Underscoring the incendiary situation on the ground, two observers from an international force in the West Bank were shot and killed. The Israeli military said Palestinians opened fire on their car on a road used mostly by Jewish settlers north of Hebron, where the force is stationed.

The two observers  from Turkey and Switzerland  were the first members of the force to be killed. The observers were sent in after an Israeli settler massacred 29 Palestinian worshippers at a holy site in 1994. The Hebron agreement, dividing the city, was signed in 1997, and the observers continued their mission.

Also, two Palestinians from a militia linked to Arafat’s Fatah movement drove a bomb-laden car toward Jerusalem’s largest mall Tuesday morning, blowing themselves up when they were stopped by police. No Israelis were hurt.

U.S. mediator Anthony Zinni made some progress in his efforts to broker a cease-fire deal. Israel grudgingly accepted new compromise proposals, while the Palestinians expressed some reservations.

Still, Sharon said Arafat must “in his own voice, to his people” declare a halt to violence before being allowed to leave the West Bank town of Ramallah, where the Palestinian leader has been trapped by Israeli troops for months.

“Unfortunately, the conditions are not ripe for allowing Arafat to go to Beirut,” Sharon said on Israel TV’s Arabic-language news, after Al-Jazeera, the Arab world’s leading satellite broadcaster, canceled a planned live interview with him.

Then, in a new condition, Sharon said, “If it is said to Israel by the United States that (Israel) can refuse to allow him to return if there are terror attacks, it will be easier for me to allow him to leave.”

Several hours later, the Palestinian Cabinet announced Arafat’s decision to stay home, saying Arafat “won’t be blackmailed or accept Israeli conditions and won’t take the risk of putting conditions on his return.”

Rahman said Sharon’s conditions showed that “the only thing that Sharon is interested in is keeping the occupation and continuing the aggression against the Palestinian people.”

Responding to Arafat’s decision not to go to Beirut, Sharon aide Raanan Gissin said it “suggests that he didn’t intend to be a man of peace, but rather a harbinger of death and terror.”

Egyptian President Hosni Mubarak also decided not to attend after his government accused Israel of “playing games” and imposing “unacceptable conditions” on Arafat’s travel.

That left the gathering without two key voices that support the Saudi plan, which calls for Israel to pull out of all the territories it captured in 1967 in exchange for an end to the Israel-Arab conflict.

Palestinian shooting and bombing attacks have killed more than a dozen Israelis over the past week, setting back the U.S. effort to hammer out a formula for enacting a truce plan that was worked out last year by CIA director George Tenet and accepted in principle by both sides.

‘We have to grit our teeth’

After Zinni presented bridging proposals that conceded some points to each side, Israeli Defense Minister Binyamin Ben-Eliezer said Tuesday that the government accepted them, but without enthusiasm. “There are parts where we have to grit our teeth,” he told Israel Army Radio, referring to Zinni’s ideas.

At a meeting with Zinni in Jerusalem on Tuesday, Palestinian security and political officials raised objections of their own. Abed Rabbo has said the Palestinians seek to link the cease-fire to a plan for peace talks and reopening Palestinian institutions in Jerusalem.

Palestinian officials said Zinni accepted Israel’s position that its closures of the Palestinian areas would be removed only gradually and not immediately, as the Palestinians demanded; but the troop pullback to positions held before the fighting began in September 2000 must be completed within five weeks, they said.

In a nod to the Palestinians, Zinni did not back Israel’s demand that many militants suspected of terrorist activities during the 18 months of fighting be arrested, said the officials, who spoke on condition of anonymity. According to Israel’s Yediot Ahronot newspaper, Israel has a list of 105 such militants.

Zinni agreed the Palestinians could arrest only so-called “ticking bombs” and anyone carrying out attacks from the moment the cease-fire is signed, they said.

Israeli and U.S. officials said another round of trilateral talks could take place Wednesday.

Complicating Arafat’s position is the fact that most recent attacks were carried out not by the Islamic militant groups that are in principle Arafat’s opposition, but by the Al Aqsa Brigades, a group closely associated with his Fatah movement.

Unsuccessful attack

The Al Aqsa Brigades also claimed responsibility for Tuesday’s attempted attack, in which a car carrying explosives blew up near Jerusalem’s main shopping mall after being stopped by police in a security check. The two men in the car were killed. Police sources said the mall was apparently the target of the planned attack.

Acting on intelligence warnings, dozens of police in recent days surrounded the mall, crowded with shoppers preparing for the Jewish holiday of Passover, which begins at sundown Wednesday.

An Israeli military source, speaking on condition of anonymity, said Israel passed on warnings about Tuesday’s attacks to the Palestinian Authority a few days ago, but no significant action resulted.

The source said the failed bombers were themselves members of the Palestinian security services and that a third man, apparently acting as a lookout at the scene, was arrested by Israeli forces.