GAZA CITY, 7 January — The Palestinian leadership accused Israel yesterday of making up pretexts to keep up attacks on Yasser Arafat, after the Jewish state said it intercepted a huge shipment of arms for the Palestinians. "Israel is seeking pretexts to plan new aggressions against the Palestinian people and to disengage from the accords concluded" with the Palestinian Authority, it said in an official statement released in Gaza City.

"The Palestinian leadership denies any link with the (arms) boat and expresses its great surprise that it is being associated with this affair at a time when it is engaged in a battle to halt the violence," it said.

The statement, carried by the Palestinian news agency WAFA, said Arafat has informed US envoy Anthony Zinni the Palestinians were ready to take part in an international probe together with the United States, Europe, Russia, the United Nations and Arab parties. A senior Palestinian Authority official earlier slammed Israel’s capture of a massive arms shipment in the Red Sea as "exaggerated Israeli comedy" aimed at pumping up the Jewish state’s flagging morale.

"This is an exaggerated Israeli comedy," said Parliamentary Affairs Minister Nabil Amr on Al-Jazeera satellite television after the hawkish Israeli Prime Minister Ariel Sharon charged that the arms haul showed Arafat was a "major player" in world terrorism.

"This flexing of muscles clearly proves that Israel’s leaders and security services which have failed effectively to oppose the intifada for 15 months need to appear as a superpower," he said, referring to the Palestinian uprising. He said that Sharon’s speech in front of the arms haul the same day at the Red Sea port of Eilat "reflects to a high degree their lack of confidence."

Sharon had called Arafat’s Palestinian Authority "a major player in the networks of world terrorism ... headed by Iran and aimed at sowing death and destruction throughout the entire world." Amr said the "irresponsible remarks made by Sharon against Arafat and the Palestinian Authority prove that this has been pushed through to make the most use" of boosting Israeli morale. "This is a government publicity campaign whose goal is to avoid making serious use of the chance for a cease-fire, a calming of tension and a return to a political solution" to crisis, he said.

Meanwhile, Zinni said yesterday he saw "real opportunities for progress" after he wound up his four-day trip to the region with a joint security meeting between senior Israeli and Palestinian security officials. In a statement issued after the meeting had finished, Zinni said: "After four days of intensive discussions with Israelis and Palestinian, it is clear that, while serious challenges remain, there are real opportunities for progress."

The statement said the US-mediated talks would continue even though Zinni himself was due to fly back to Washington at midnight (2200 GMT), adding that the retired US general would return to the region "in the near future to assess what the parties have been able to achieve" in the ongoing meetings. The meetings are part of a US-mediated effort to reinforce a fragile cease-fire which has started to take hold in the past two weeks.

Israel was represented in yesterday’s security talks by officials from the internal security service Shin Beth and the army, although no details of exactly who was participating or where the meeting was held were released. The last high-level meeting between the two sides was held on Dec. 26 at the Erez crossing between Israel and the Gaza Strip after Zinni left for Washington on an initial mission that failed.