HEADLINE: Arafat helpless as Israel tears down his people's flag: Jonathan Steele in Ramallah watches the final humiliation of the besieged Palestinian leader in a move that drew condemnation from Britain and France
BODY: IT WAS precisely 1.28pm yesterday when Israeli troops emerged on the roof of what had once been the proudest building in the headquarters of the Palestinian Authority and unceremoniously hauled down the Palestinian flag.
As Yasser Arafat, the Palestinian leader, was holed up powerless and humiliated in his private offices a few feet away, the disappearance of the flag from above the meeting hall where he had once received the US Secretary of State Colin Powell and other foreign dignitaries marked Israel's final repudiation of the Oslo agreement, which it had signed on the White House lawn nine years ago.
It also launched a new international crisis that could widen the splits between the Bush administration and European governments, already visible over US plans to attack Iraq. The US is backing Israel's action while Britain and France condemned it as unacceptable. In a statement last night the Foreign Office said: 'We understand Israel's need to take steps to protect itself from terrorist attacks, but this siege is not the answer. It will not solve the problem of Palestinian violence; peace can be achieved only through all parties returning to the negotiating table, not by military action.'
In the meantime all efforts to promote reform and new elections in the Palestinian territories, let alone find a way to resume peace talks, are on hold.
The Oslo agreement, the greatest achievement of Bill Clinton's presidency, recognised the Palestinian Authority as an interim government on the way to a Palestinian state and Israel's withdrawal from the occupied territories. Now it is in tatters.
'There you are, that's the proof,' said Abdullah Injum, a middle-aged electrician, as we watched from under a vine-covered trellis in his garden a hundred yards away while troops raised the blue and white flag of Israel where the Palestinian flag had been. 'Arafat is not the problem for the Israelis. They want to eliminate the Palestinian, issue, pure and simple.'
'The Israelis first invaded the compound several months ago, but this is the first time they have put up their flag. I feel pain to see it,' said his wife, Kawther.
While the political humiliation tightened, the physical pressure on the besieged Palestinian leader and the few dozen people left in the compound with him was also intensifying. Giant excavators clanked and smashed into brick walls, their huge metal teeth wrenching at roof parapets and window frames.
A walkway that once connected Arafat's private quarters with the meeting hall was torn from its moorings. The pipes taking water into his rooms were churned up. Tanks pointed their gun-turrets at his building, the only place where the Palestinian flag still flies. 'The siege is moving fast and is very aggressive,' said an Arafat aide whom we contacted inside the building by mobile phone.
'Everyone is staying in the room where they are. There are snipers everywhere. If you leave the room, they will shoot at anyone visible. We still have electricity, but the water is gone. We shall soon run out of drinking water and food,' he added.
A photographer in the building with Arafat said the 73-year-old leader was showered with dust when a tank shell hit the floor above him but he was unhurt.
Israel started tightening the noose on the Palestinian leader after two suicide bombings on successive days last week that killed nine people, ending a six-week lull in attacks. At a stormy Cabinet meeting on Thursday night, the Government decided to 'isolate' Arafat, even though he has condemned suicide bombings and recently approved a statement denouncing them as alien to Islamic values and urging all Palestinian militant groups to do likewise.
While promising not to harm Arafat, Israel accuses him of harbouring militants in the compound, including Tawfik Tirawi, his intelligence chief, and Mahmoud Damra, head of Force 17, the Palestinian leader's bodyguard unit.
With Arafat vowing not to give them up or surrender himself, and the Israelis insisting that they will not relax the pressure on the last building in the compound until their demands are satisfied, the prospect of a long siege is looming.
The US position will be crucial. Nabil Abu Rudeineh, an aide to Arafat, said after contacts with various foreign governments he had been told that 'the Americans have told the Israelis to stop'.
'They have stopped shooting,' he added. 'But the bulldozers are still demolishing everything. The Americans should be aware that what Israel is doing and Washington's backing for Israel is endangering the interests of the US in the region.'
Ari Fleischer, the White House spokesman, said Israel should 'bear in mind the consequences' of its action. He gave support to the Israeli demand for the surrender of the militants by adding 'the Palestinians have responsibilities to make certain that they prevent attacks, halt attacks and arrest the militants who are responsible'.
While the siege tightened, a day-long curfew turned Ramallah, the capital of the Palestine Authority, into a ghost town.
The crisis has only served to enhance Arafat's support. He was embarrassed 10 days ago when the Palestinian parliament almost passed a vote of no confidence in his government, alleging corruption by many Ministers who are his cronies. Ministers resigned en masse to forestall MPs going ahead with the vote.
Now Arafat's political position has been strengthened. 'It's not a matter of whether I love or hate Arafat,' said Abdullah Injum. 'He is the symbol of our national identity. I don't think that destroying his compound will solve the Palestinian issue.
'Arafat is paying a heavy price for rejecting Sharon's type of peace. After Oslo, for years there were no suicide operations in Israel.
'But the result was more confiscation of land and more new settlements. Now Israel is trying to justify their position by calling Arafat a terrorist.'