GAZA CITY/MADRID, 1 February — The hawkish Israeli Prime Minister Ariel Sharon has expressed regret he did not have Palestinian President Yasser Arafat killed 20 years ago in the Lebanon war, as Israeli troops shot dead two Palestinians for what the Israelis alleged were planting a bomb near a Jewish settlement in the Gaza Strip yesterday.

Sharon’s comment came as the UN Security Council voiced growing alarm at the "unprecedented levels of violence" in the Middle East and called for an end to hostilities and a return to negotiations.

Sharon, quoted in the Israeli daily Maariv, said he should have given the order for Arafat to be "liquidated" when Israel invaded Lebanon in 1982 to chase out the Palestine Liberation Organization (PLO). "In Lebanon, there was an agreement under which he must not be liquidated, and all things considered I regret it," Sharon told Maariv. Sharon was defense minister at the time of Israel’s intervention in the Lebanese civil war. Arafat, chairman of the PLO, was based in Beirut.

Palestinian Minister Saeb Erekat said Sharon’s comment "means he still wants to kill him (Arafat) now, and shows the mindset of a Mafioso and a guerrilla rather than of a prime minister." "We strongly condemn such a statement and ask the United States to stop Sharon before it’s too late," said Erekat, adding that Washington "should stop treating the Sharon government and Israel as a country that is above the law."

The European Union appeared to back off yesterday from an Italian proposal to convene a Middle East peace conference following newspaper comments by Sharon. "If these remarks are accurate, I deplore them and they warrant rejection," said Spanish Foreign Minister Josep Pique, whose country currently holds the rotating presidency of the European Union.

Spanish Prime Minister Jose Maria Aznar declared that he was "very pessimistic" about the situation in the Middle East and warned that "things could get worse." "There is a total loss of credibility between the parties and it is impossible to move forward," he said.

Italian Prime Minister Silvio Berlusconi suggested Monday that Israeli and Palestinian officials be invited to the EU’s next meeting in Spain on Feb. 8-9 to participate in talks. Spain said Wednesday it was consulting with EU members on Berlusconi’s "idea" for an international peace conference, but officials in Brussels were noticeably cool on the issue yesterday.

Israel assassinated the head of another PLO faction, the Palestinian Front for the Liberation of Palestine (PFLP), last August. The extreme right-wing former general told Maariv that if Arafat "takes all the measures asked of him, he will once again become a partner for peace." Israel has said Arafat must, in particular, arrest the PFLP men who killed a Cabinet minister in October in revenge for Israel’s slaying of the group’s leader, Abu Ali Mustafa.

Sharon told another Israeli daily, Yedioth Aharonot, that on a trip to Washington next week he will ask Bush to shun Arafat, whom the US leader himself has accused of "enhancing terror" for failing to crack down on militants. "There are other Palestinian leaders, and I will meet them," Sharon said.

In the Palestinian territories, Israeli violence raged yesterday, having gathered steam in January after a lull of several weeks inspired by a truce call from Arafat on Dec. 16. Fresh violence erupted shortly before Middle East envoys from the United Nations, the European Union and Russia were due to meet US officials in Washington to discuss the conflict.

Israeli troops shot dead two armed Palestinians in the southern Gaza Strip following a bomb blast in which a Thai worker was injured. The two men were pursued and killed after allegedly planting a bomb on a road leading to the Jewish settlement of Ganei Tal, the army said.

The armed wing of the radical group Hamas, Ezzedine Al-Qassam Brigades, claimed responsibility. Later in the same area, Jewish settlers were ordered into shelters after the army found five heavy mortars primed and aimed at the Gush Katif settlement bloc — set to be triggered by a timer. In the Palestinian-ruled city of Ramallah, 2,000 mourners, some firing guns in the air, marched behind an empty coffin in honor of Wafa’ Idris, a 28-year-old medic who became the first woman to carry out a deadly bombing against Israelis.