Arafat has been confined to the West Bank city of Ramallah since December -- when the Israeli military imposed a security cordon around his residence. Israeli airstrikes also destroyed two helicopters used by Arafat for travel around the region. 

The strikes followed a spate of suicide bombings carried out by Palestinians in which more than 20 Israelis died and after the Israeli Cabinet described the Palestinian Authority as a "terrorist-supporting entity." 

Israeli Prime Minister Ariel Sharon has set two conditions before considering lifting the travel restrictions on Arafat. 

Sharon demanded the arrest and trial of the killers of Israeli Tourism Minister Rechavam Ze'evi -- and that those responsible for smuggling arms aboard a ship the Israelis captured in January in the Red Sea be identified and punished. 

Palestinian security officials said Thursday that three militants suspected in the assassination of Ze'evi had been arrested, and Arafat has said that one of those involved in the arms smuggling has been arrested and others are being sought. 

Sharon plans buffer zones
The Cabinet meeting comes after Sharon's announcement that his government has plans to set up buffer zones to protect Israel's borders. The Israeli prime minister offered few details about the zones in a televised address Thursday. 

Israel Radio, quoting senior Israeli sources, said that the plan calls for the creation of a zone between 200 and 300 kilometers long running north to south along the "1967 Green Line," the border Israel established on the West Bank after the Six-Day War in 1967. 

Sharon's plan followed an upswing in Israeli-Palestinian violence in the region that has cost 50 lives since Monday. The violence continued Friday with the shooting death of a Palestinian, who set off an explosive device at a supermarket in the West Bank town of Efrat, according to the Israel Defense Forces. 

A security guard at the store shot and killed the Palestinian, an IDF spokesman said. After he was killed, the IDF said, he was found to be wearing a belt packed with explosives. 

Later in the day, the Israeli army reported one Israeli was killed when shots were fired at his car on the Jerusalem-to-Ramallah bypass road. No other details were available. 

Overnight Friday, Israeli forces shot and killed a Palestinian man after he ran toward an IDF outpost in the West Bank town of Halhul, shouting "Allah is great," an IDF spokesman said. The man later was found to be unarmed. 

Security talks held
The incidents followed talks between top Israeli and Palestinian officials that Israeli sources said were aimed at reducing the level of violence and achieving calm. 

At the overnight meeting, Avi Dichter, head of Shin Bet, the Israeli internal security service, and Maj.-Gen. Giora Eiland, chief of Israeli military operations, discussed security matters with Jibril al-Rajoub, Palestinian preventative security chief for the West Bank, and Mohammed Dahlan, who holds a similar post in Gaza. 

U.S. Secretary of State Colin Powell spoke by phone Saturday with Arafat, Sharon, and German Foreign Minister Joschka Fischer, a state department official said.