Defiant in the face of Israeli and US demands for an end to violence and incitement, PLO chairman Yasser Arafat made a speech yesterday which was effectively a call to arms.

Speaking in Gaza to leaders of his Fatah faction of the PLO, Arafat said the next battle should be fought the same way as the battle of Karameh in Jordan in 1968, which launched Fatah's "armed struggle" against Israel.

Accusing PM Binyamin Netanyahu of destroying the Oslo accords, Arafat warned:

"This people will never kneel ... Remember Karameh. It was the first victory of the Arabs and we gave 294 martyrs. [incumbent Infrastructure Minister and Defence Minister during the Lebanon War Ariel] Sharon should remember the lesson of Beirut -- we paid 72,000 martyrs and wounded ...

"We have a big battle ahead of us, one that is much more difficult than anything that came before, but we will conduct it as we conducted all past battles ... We must stock up on muscle, ideas, and food ... We are all live martyrs committed to our oath since we fired our first bullet ... until Jerusalem.

"We are going to protect Palestinian dreams, until one of the flowers of our youth raises the flag of revolution from the minarets and churches of Jerusalem. They see it as far away. We see it very near."

In reaction. Netanyahu called the remarks "regrettable", and said he hoped "the vituperative statements will cease." He said Arafat's remarks would "not bring us closer to peace."

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