Jerusalem ? Prime Minister Ariel Sharon said for the first time Monday that Israel had no plans to kill Yasser Arafat, even as he accused the Palestinian leader of continuing to orchestrate attacks on civilians.

Sharon delivered his assessment as Israel confirmed plans to begin providing services to eight settlement outposts in the West Bank. The announcement dealt another blow to the faltering U.S.-backed peace plan.

That plan, known as the “road map,” calls for a construction freeze in Israeli settlements and removal of outposts erected since 2001. Palestinians have complained that Israel is undermining the peace plan — but have also balked at the requirement that they dismantle militant groups.

In another development, Palestinian Prime Minister Ahmed Qureia said that he was making progress in talks with Islamic militants about halting fighting with Israel.

Sharon met with a delegation of lawmakers from the European Parliament, where he was asked about Arafat. Israel’s Cabinet last month decided to “remove” Arafat at an unspecified time in response to Palestinian suicide bomb attacks, prompting speculation the Palestinian leader would be expelled or assassinated.

“I don’t see any plans to kill him,” Sharon told the lawmakers, while accusing Arafat of orchestrating attacks on Israelis during three years of fighting.

“You don’t have to worry, he’s alive, and not only is he alive but very active in taking all the … steps … that bring to murder of children, civilians, the old,” Sharon said.

Sharon was also asked whether it is right to build new settlements in the West Bank and Gaza Strip, areas where the Palestinians have hopes to establish an independent homeland.

“We do not build now. We do not aid a new settlement there or Jewish communities there,” Sharon said. “If sometimes it happens, the army removes them.”