A day after he stunned Israelis and Palestinians by describing his nation's long hold on the West Bank and Gaza Strip as an "occupation", Ariel Sharon backtracked, referring to Israel's "control over disputed lands".

The Israeli Prime Minister's office issued a clarification on Tuesday after he was criticised by furious right-wing MPs for using a term many believe could buttress Palestinian claims to the land seized by Israel in 1967.

The dispute over language came as the fragile new peace process appeared to struggle to make headway. Israeli and Palestinian leaders postponed a meeting planned for yesterday ahead of talks with President George Bush in Jordan next week.

With the US urging the two sides to push forward on the "road map" peace plan, Mr Sharon has faced continued criticism from right-wing politicians for persuading his cabinet to endorse it on Sunday and for his comments defending it.

"You may not like the word, but what's happening is occupation," Mr Sharon told angry MPs from his Likud party on Monday. And occupation, he said, repeating the word throughout his comments, "is a terrible thing" for both Israelis and Palestinians.

On Tuesday Mr Sharon said he had been referring to Israel's rule over Palestinians, not the occupied territories themselves.

Palestinian officials had described Mr Sharon's original words as a watershed for a man long viewed as unlikely to cede territory or forge peace.

The Palestinian Information Minister, Nabil Amr, and other officials voiced concern, however, about emerging details of Israel's objections to the peace blueprint that Mr Sharon's cabinet insisted on attaching before it voted to endorse the plan.

Israel has demanded a "complete cessation of terror" before it begins implementing the plan. Palestinian officials say this would hold the process hostage to anyone with a bomb or gun.

The demand is among 14 amendments, leaked to the media on Tuesday, that the Israeli cabinet is seeking to the plan.

However, the Israelis say they should not be subject to similar conditions.

"The road map will not state that Israel must halt violence, incitement against the Palestinians," the document says.

Other minimum demands include a requirement that the Palestinians waive any right of return to Israel for refugees, and the dismantling of Hamas and other "terrorist" organisations.

Israel also demands a bar on any discussion within the plan of the fate of established Jewish settlements or Jerusalem until final-status talks towards the end of the process, and acceptance before talks begin that Israel will control the borders and other aspects of a provisional Palestinian state.

Crucially, Israel objects to the concept of the sides implementing commitments in parallel. Instead it wants "performance benchmarks", and the right to decide if these have been reached.

The Palestinian Prime Minister, Mahmoud Abbas, said yesterday that Israel should drop its reservations and embrace the peace plan as a historic opportunity.

THE NEXT STEPS
• Ariel Sharon and Mahmoud Abbas to meet as early as today.
• Israel's US ambassador, Daniel Ayalon, meets George Bush today.
• Bush to meet Arab leaders in Egypt to promote the plan.
• A summit with Bush, Sharon and Abbas in Jordan next Wednesday.

The Israeli and Palestinian prime ministers planned to hold preliminary talks today ahead of a meeting with President George W Bush next week to push forward a US-backed Middle East peace plan.

Israeli diplomatic sources confirmed the meeting between Prime Minister Mahmoud Abbas and Israel's Ariel Sharon. Earlier, the White House announced both men would meet Bush in Jordan when he visits Egypt, Jordan and Qatar from June 2 to 5.

In Washington, a Bush administration official said two senior officials in charge of Middle East policy would leave for the Middle East to prepare for Bush's meetings.

Assistant Secretary of State William Burns and Elliott Abrams, the National Security Council director responsible for the Middle East, would go first to Cairo, then Amman, Riyadh and Jerusalem, the official said.

In his first Israeli newspaper interview since taking office, Abbas said he would not settle for a temporary ceasefire by militants in a 32-month-old uprising for Palestinian statehood.
He demanded "absolute calm".

In continued violence early today, a 20-year-old Palestinian militant was shot and killed by Israeli soldiers in the West Bank city of Jenin, Palestinian medics and military sources said.

Yesterday, Palestinian witnesses and security sources said Israeli forces shot dead a member of Palestinian President Yasser Arafat's Force 17 security unit yesterday as he sat in his car. Israeli security officials denied any connection with the slaying in the West Bank city of Ramallah.

In the interview published yesterday in Israel's daily Haaretz, Abbas urged Israelis to shed their fears over the US-backed "road map" to peace.

"This is a historic opportunity to return to a track of normalcy," Abbas said. "Follow the map and don't waste time over details."

In their second meeting since Abbas took office in April, Sharon will focus on ways the Palestinian premier can reduce violence against Israelis so Israel can restore normal life to Palestinian towns, Israel radio said.

The road map outlines reciprocal steps leading to an end to violence and the creation of a Palestinian state by 2005. The Palestinians embraced it. Israel accepted it after Washington agreed to address most of its 14 reservations.

In an interview with Reuters, Sheikh Ahmed Yassin, founder of the Islamic militant group Hamas, said the road map was "a trick" and Washington could not be trusted.

Islamic militants have claimed responsibility for most Israeli civilian deaths during the uprising.

Yassin said Hamas might suspend attacks inside Israel if Israel ended a military crackdown on Palestinians and released some 7000 prisoners, a proposal Israel has rejected.

The Bush administration said today that it had received word that Iran had recently arrested some Al Qaeda members operating in its territory, but that the actions had failed to ease American concerns about Iranian support for terrorist activities.

"The steps that the Iranians claim to have taken in terms of capturing Al Qaeda are insufficient," Ari Fleischer, the White House spokesman, said, after news reports of the arrests from Tehran. "It is important that Iran live up to its commitments and obligations not to harbor terrorists."

Administration officials said it was unclear how many Al Qaeda members had been arrested in Iran, what their identities were and whether they included any of the top officials, who some believe have been functioning with Iranian acquiescence.

Still, they said the arrests had failed to meet the demands that Al Qaeda members not simply be arrested but also handed over to Saudi Arabia or other authorities investigating the bombing of three foreign compounds in Riyadh earlier this month.

Despite the generally tough tone on Iran, however, administration officials said a high-level interagency meeting that had been scheduled for today to decide possible new punitive steps against the Tehran government had been postponed, in part to study the arrests and other developments.

The officials said the information about the arrests needed to be squared with other intelligence on Iran, and also with information from other countries that have an intense interest in Iranian behavior, including Britain and Pakistan.

Mr. Fleischer, dismissing Iran's actions on terrorism, also took a tough position on Iran's nuclear program, which the government in Tehran says is for peaceful purposes.

"The United States rejects that argument as a cover story," Mr. Fleischer said. "Our strong position is that Iran is preparing, instead, to produce fissile materials for nuclear weapons. That is what we see."

American officials said they were also studying official comments in Moscow that Russia was also trying to persuade Iran to keep its nuclear program peaceful, especially the Russian-financed reactor at Bushehr, which the United States says could be used to make weapons-grade plutonium.

Mr. Fleischer, referring to American pressure on President Vladimir Putin to act against Iran, said the United States remained "hopeful that we can effect a change in policy by Russia, but it does remain a matter of some dispute."

Administration officials say there is a split in the administration over how to proceed with Iran, with some advocating tough measures like cutting off diplomatic contacts and possibly supporting antigovernment opposition groups based in American-occupied Iraq.

Earlier this month, a scheduled meeting between Iranian and American officials was canceled. Instead, the United States sent a tough demand on Al Qaeda. Some officials were said to favor that those meetings, which have been going on for more than a year, be cut off.

Today, Secretary of State Colin L. Powell sought to play down the divisions. "Our policies with respect to Iran have not changed," Mr. Powell said following a meeting with the president of Madagascar. "We do not approve of their support of terrorist activities. We have made it clear over the years that we disapprove of their efforts to develop a nuclear capability."

Going further, Richard A. Boucher, the State Department spokesman, dismissed the idea that the United States was close to breaking off diplomatic contact — there have been no formal relations since the Iranian revolution more than two decades ago.

"We have ways of communicating, we have ways of contacting them, and we would expect to do so again," Mr. Boucher said.

The day's developments were a reminder of the fluid nature of American policy in the Middle East in the weeks following the war with Iraq. Some officials said the meeting on Iran due today was put off in part because of a separate preoccupation: planning President Bush's trip to the region next month.

American officials say their priorities toward Iran have been to stop its nuclear weapons program by using a combination of diplomacy and implied threat of force and to try to end Iran's support of terrorist groups.

On terrorism, the main concern has been Iran's support of Hezbollah, which has carried out attacks on Israel and other Western targets, often from bases in Syrian-controlled Lebanon.

Al Qaeda is believed to have operated in different parts of Iran, notably in the north and also in the barren southern mountains of Baluchistan, on the Pakistan border. Some American officials say that Iran has played host to Al Qaeda units that fled Afghanistan after the war there in 2002 and, more recently, from northern Iraq.

American officials say Iran has handed over Al Qaeda members in the past to Saudi Arabia and perhaps Pakistan, but there is disagreement on whether such steps were significant or sincere.

Meanwhile, Defense Secretary Donald H. Rumsfeld today cited another more recent problem that American officials have been worried about, Iran's support of Shiite groups in Iraq, which may be part of an effort to establish a Shiite theocracy in that country.

"Iran should be on notice: efforts to try to remake Iraq in Iran's image will be aggressively put down," Mr. Rumsfeld said at the Council on Foreign Relations in New York.