Between three and five Arab mortar shells were fired at Katif this afternoon, and five shells at N\'vei Dekalim - both in Gush Katif, Gaza - last night; no one was hurt. Palestinian terrorists also fired last night at Ganim (northern Shomron), an army post near Ganei Tal (Gush Katif), and an army force on the southern Shechem bypass road. The soldiers returned fire in the latter two cases. Border Guard policemen arrested an eastern Jerusalem Arab today while performing a routine check, and found him in possession of a large knife; he admitted that he had planned to stabl soldiers and policemen.



Prime Minister Sharon is scheduled to meet with U.S. President George Bush in Washington next week, and hopes to do so while still conducting a policy of restraint. His meeting this morning with Foreign Minister Shimon Peres, Labor Minister Eli Yeshai, and Finance Minister Silvan Shalom (Defense Minister Ben-Eliezer is still abroad] did therefore not lead to any dramatic military decisions - although the mini-cabinet did begin a \"re-assessment of the ceasefire.\" This, in light of what is called the ceasefire\'s \"unilateral nature, given the continued terrorism and incitement and lack of arrest of terrorists by the PA.\"



The re-evaluation will continue tomorrow in what could be a fateful meeting of the larger security cabinet. Some of its members have already come out in favor of resorting once again to the policy of \"selected liquidations\" of terrorist leaders. Minister Eli Yeshai, who visited Hevron today, said there that there is a limit to what Israel can take, and that the time had arrived for a \"re-evaluation of Israel\'s ceasefire policy.\" Minister Shalom is also apparently in favor of announcing an end to the ceasefire.



A report submitted to the government indicates that U.S. officials are not optimistic that the ceasefire will be effective enough to permit the resumption of diplomatic negotiations.