Prime Minister Ariel Sharon strongly denies having promised to U.S. President George Bush in Aqaba that Israel would not carry out targeted killings of Hamas terrorists. He told the Cabinet today, "Abu Mazen is a chick without feathers, and I can't wait for him to grow them. If I have to choose between the war on terrorism and helping Abu Mazen, I choose the former." GSS Chief Avi Dichter said that the main problem is that 70% of the PA military organizations are under Arafat's control.

IDF Chief of Staff Lt.-Gen. Moshe Yaalon told the Cabinet ministers this morning that Israel finds itself in a bind: "Abu Mazen is requesting that we give him time to organize, and the Americans want us to be considerate of his needs and not kill the terrorist leaders" - even while terrorism continues to rage. On the other hand, as Israel's Ambassador to the U.S. Danny Ayalon explained today, "Sharon offered Abu Mazen the option of taking one area at a time in which to try to control terrorism - but Abu Mazen said that even that was too much for him at present."

Mofaz said that the PA leadership of Abbas and Dahlan is not willing to take responsibility for the situation, and "the more the terrorism escalates, the less responsibility Abbas and Dahlan take, leading to the weakening of their position and further harm to the diplomatic process."

PA Information Minister Nabil Amr, quoted in the PA newspaper Jerusalem Times, said this week that force will not be used to subdue any Palestinian terrorist faction. "We will not use weapons or force," he said. "We will go to them with a quiet dialogue. We will tell them the dialogue will not go on forever, we need to reach a conclusion."

The Cabinet approved another billion-shekel cut in the national budget today. Half of the cut will come from the military, despite strong objections by Defense Minister Sha'ul Mofaz. The other half of the cut will be divided among the other government ministries. Welfare Minister Zevulun Orlev, who in the end voted for the cut, said that a society that does not offer solutions to those affected by the economic plan, and even cuts welfare service positions, is a "cruel" one.