OCCUPIED JERUSALEM, 26 June — US President George W. Bush’s new Middle East policy yesterday stirred anger and despair among Palestinians and throughout the Arab world but delighted Israel as it pressed on with its massive military offensive in West Bank and prepared for operation in the Gaza Strip.

Palestinian leader Yasser Arafat yesterday brushed off US President George W. Bush’s call for his ouster as Israeli troops seized the West Bank’s largest city and geared up for action on the Gaza Strip. Battling for his political survival, Arafat signaled he was eager to work with Bush on creation of a Palestinian state but rejected any notion the US president would have a say in his political future. Arafat brushed aside the call for Palestinians to replace him with new leaders “not compromised by terror”.

“It will be decided by my people and no one else,” Arafat told reporters after meeting with French Foreign Minister Dominique de Villepin at his battered headquarters in the West Bank town of Ramallah. De Villepin said that Arafat, elected head of the Palestinian Authority in 1996, confirmed he would call presidential and legislative elections in January and local elections two months later.

In his speech laying out a new Middle East strategy Monday, Bush made eventual Palestinian statehood conditional upon the replacement of Arafat with “a new and different Palestinian leadership ... not compromised by terror.”

International reaction to Bush speech was muted, with most Arab and European leaders seeing positive elements but some warning that Arafat’s political fate was a matter for the Palestinian people to decide.

British Prime Minister Tony Blair signaled support for Bush’s policy but did not explicitly back the removal of Arafat as Palestinian leader, his spokesman said. Blair “does believe that he (Arafat) has let the Palestinian people down”, the spokesman told reporters, but stressed: “It is for the Palestinian people to choose their own leader.”

But China said it still saw a role for Arafat in the peace process. Iran criticized the US stand while the semi-official Jordanian newspaper Al-Dustur also backed Arafat and called the Bush address “disappointing.”

Arab League Secretary General Amr Moussa said Bush’s strategy had some “positive points” but stressed Arab countries must be involved in the creation of a Palestinian state. He made no mention of Arafat.

Egyptian President Hosni Mubarak, one of the main regional peace brokers, called Bush’s speech “totally balanced” and denied the American was seeking to get rid of Arafat. “I do not see in this speech the removal of Arafat, but a demand for reforms of the Palestinian Authority and the formation of a new administration,” the state MENA news agency quoted him as saying.

Swedish Foreign Minister Anna Lindh yesterday slammed Bush’s plan, saying that his call for the ouster of Arafat was unacceptable. Lindh, speaking to Swedish news agency TT, said the demand “was neither acceptable in terms of international law nor politically wise.” “Palestinians choose their leaders themselves and I am not sure that setting this type of condition promotes the reform forces within the Palestinian Authority,” she said. “And we don’t know what risks coming after Arafat,” she added.

US Secretary of State Colin Powell said yesterday in Washington the US decision to abandon Arafat was made “reluctantly” and only after giving him many chances to renounce terrorism and implement reforms. Arafat had been warned in April he might lose US support unless he mended his ways, Powell said. “We weren’t going to move in a positive direction unless changes are made and the president called for those changes yesterday.”

Israeli officials, who have been trying for months to sideline Arafat, exulted in Bush’s speech, widely seen here as a green light for the hawkish Israeli Prime Minister Ariel Sharon’s hard-line policies toward the Palestinians. Hours after the address, dozens of Israeli tanks and armored personnel carriers poured into Hebron, killing four Palestinian security officers and arresting more than 100 others, Palestinian security officials said.

While the conflict raged on unabated, world leaders generally praised Bush’s support for a Palestinian state but many insisted that Arafat’s fate be decided by the Palestinians themselves. The European Union pointedly called for an international conference on the Middle East, a measure conspicuously absent from Bush’s speech.

UN Secretary-General Kofi Annan also questioned the wisdom of holding elections in the Palestinian territories now, telling reporters in New York that they might be won by “radicals.”

Arab League Secretary-General Amr Moussa said there were “positive points,” but he pointedly avoided any mention of the fate of Arafat. Jordan, one of only two Arab states to have a peace treaty with Israel, insisted reforms “must come from within Palestinian society,” and offered to work with Washington.

But Arab newspapers lambasted Bush’s speech as badly biased. Al-Bayan, which speaks for the Dubai government, slammed it as “unbalanced and totally Israeli, imposing tough preconditions on the Palestinian and Arab side for the creation of a provisional Palestinian state.”

A curfew was imposed on the city of 140,000 people on the southern West Bank, the seventh major Palestinian area re-occupied by the Israelis, while an armored column rumbled into the nearby town of Dura. Two Palestinian policemen, an intelligence officer and a security officer were killed when the Israelis opened fire on the Palestinian leadership’s Hebron offices, the officials said. At least five other people were wounded.

Among those taken prisoner in Hebron was Nizam Al-Jaabari, the head of the city’s intelligence services, and Sheikh Jawad Al-Natshe, a political leader of the Palestinian resistance group Hamas, the sources said. The army also confirmed it had blown up the Hebron house of Hamas activist Yasser Sharabati. The Israeli Army continued to round up Palestinian asctivists across the West Bank, including members of Hamas, which has claimed most of the suicide attacks on Israeli civilians.

As well as Ramallah and Hebron, Israeli troops have occupied Nablus, Jenin, Qalqilya, Tulkarm and Bethlehem, and other smaller towns and villages. Only Jericho has been spared among the main towns,

Sharon was also setting his sights on the Gaza Strip, where a helicopter raid Monday killed six people in two cars, including two Hamas activists, and wounded 10 others. He said the helicopter missile attack heralded “a massive military operation” against Hamas. Israeli soldiers manning a military post in the central Gaza Strip yesterday shot dead a 19-year-old Palestinian from the Islamic Jihad group, the army and Palestinian sources said.