OCCUPIED JERUSALEM, 15 April — US Secretary of State Colin Powell yesterday failed to persuade Israel to withdraw from reoccupied Palestinian territories. The secretary of state first met Palestinian leader Yasser Arafat in his besieged Ramallah headquarters and then conferred with Israeli Prime Minister Ariel Sharon.

Powell spoke briefly with reporters after his talks with Arafat. He said: “We just completed a useful and constructive exchange with Chairman Arafat and his staff ... We exchanged a variety of ideas and discussed steps how we can move forward.”

Arafat did not talk to reporters but his aides said that Powell demanded a complete halt to Palestinian attacks while the Palestinian leader wanted a complete withdrawal of Israeli forces before they could fulfill their “security obligations”. Palestinian sources said Israel was insisting on “right to hot pursuit” of fighters inside Palestinian-ruled areas.

Sharon again refused to commit to a deadline for pulling back his troops. An Israeli official confirmed that Sharon would not pull out the forces until its crackdown on the fighters is over.

Separately, Sharon again floated the idea of a conference of Middle East leaders with him. But no venue, participants or timing have been set, a senior State Department official said.

Powell’s spokesman said the secretary of state will travel to Lebanon and Syria today to discuss attacks by Hezbollah fighters on Israeli positions, before returning the same day to Jerusalem.

International concern and condemnation have been mounting over the events in the Jenin refugee camp.

The Israeli Army escorted a group of reporters into the battered camp yesterday, and showed them the corpse of a lone fighter from a distance.

The camp remained off-limits to reporters. Israel’s Supreme Court gave the army permission yesterday to bury Palestinians killed in the fighting in the refugee camp, throwing out a suit brought by two Arab Israeli members of parliament. The court ruled in favor of the army after it was assured the bodies would first be identified by the dead Palestinians’ families in coordination with the International Committee of the Red Cross. However, in a nod to the Palestinian side, the court ruled families will be allowed to bury the bodies unless they choose to cede the right to the army. On Friday, the court ordered the army not to bury the dead from the Jenin camp. Palestinians rejected an Israeli proposal for 200 fighters trapped in Bethlehem’s Church of the Nativity to choose between an Israeli court and lifelong exile, while the Israeli Army threw journalists out of a hotel overlooking the Christian shrine.

The Cabinet also decided to build electric fences around Jerusalem neighborhoods backing on to Palestinian-run areas. The fences will be put up close to Jerusalem and around the Palestinian self-rule towns of Jenin and Tulkarm in the northern West Bank, army radio said.

Germany became the first European country to apply direct economic pressure on Israel, confirming the suspension of the supply of military equipment, as EU ministers prepared to debate possible sanctions against the Jewish state.

German Defense Minister Rudolf Scharping said a shipment of replacement parts for military equipment had been “interrupted but not stopped” to send “a signal” to Israel over the Middle East conflict. He told public television network ZDF that the policy was not an “embargo” but intended as a response to Israel’s massive assault on the Palestinian territories.

Germany is Israel’s largest EU trading partner and widely recognized as being one of the least critical European states of Israel. Scharping said that Germany has “no plans or conceptual considerations” for a mission of the German armed forces as part of a possible international intervention force in the Mideast. That appeared to contradict the position of Chancellor Gerhard Schroeder who had earlier expressed his support for an international force under UN control.