Israeli helicopters destroyed Yasser Arafat's seaside office in Gaza City early yesterday, hours after an Islamic militant blew himself up and killed 11 people in a crowded cafe across the street from Israeli Prime Minister Ariel Sharon's Jerusalem residence.

　　"We are in a war," Sharon told his Cabinet. "All of us must stay united and make every effort to stand up to this wave of terror."

　　The Israeli leader said he was prepared to enter negotiations with the Palestinians on a cease-fire, but Israel would not halt its military actions against militants. "If the terror continues, our operations will continue," he said.

　　With the violence surging, the United States is pushing for a cease-fire, and US envoy Anthony Zinni is expected in the region later this week. Washington has called on the Israelis to exercise restraint, and Sharon has dropped his demand for a week of complete calm before moving forward with a US truce plan, according to The Associated Press.

　　Palestinians, meanwhile, said the Jerusalem bombing and a shooting attack at a seafront hotel in Netanya, both on Saturday night, were in response to Israel's stepped up military campaign against the Palestinians, including raids on several refugee camps, considered strongholds of militants.

　　"This is the normal response from the Palestinian resistance for all the Israelis have done in the refugee camps, to Palestinian civilians, women and children," said Ahmed Abdel Rahman, a top adviser to Arafat. "The Israelis have to expect such operations whenever they escalate their military attacks against our civilians."

　　In the worst spate of violence since the fighting began 17 months ago, 120 Palestinians and 50 Israelis have been killed in the first 10 days of March.

　　On Saturday, 14 Israelis were killed, including 11 in the cafe bombing. Among the dead in the Netanya attack was a baby girl. On the Palestinian side, seven people were killed, including a 15-year-old girl and several assailants.

　　In the Jerusalem bombing, the assailant walkedsintosthe Moment cafe, frequented mostly by Israelis in their 20s, and detonated explosives in the late evening.

　　The Islamic militantsgroupsHamas claimed responsibility, and identified the bomber as Fuad Horani, a resident of the Al Arroub refugee camp south of Bethlehem in the West Bank.

　　In new violence yesterday, a Palestinian opened fire at Israelis at the gate of a Jewish settlement in the Gaza Strip, wounding two men, one of them critically, before being shot to death. The al Aqsa Brigades, a militia affiliated with Arafat's Fatah party, took responsibility for the shooting.

　　In a highly symbolic response to the Saturday night attacks, Israeli helicopters and gunboats fired at least 25 missiles at Arafat's large Gaza City compound in the early hours of yesterday, pulling down most of the two-story office headquarterssintosa pile of rubble. The building had been evacuated earlier.

　　At his office, Arafat had received world leaders, including former US President Bill Clinton and the late King Hussein of Jordan. Bricks and roof tiles were scattered on the ground and wires dangled from the ceiling.

　　Arafat himself has been confined to his West Bank headquarters in Ramallah for more than three months by Israeli forces.

　　Amid the spiraling violence, the United States, the Europeans and Arab leaders are all working on plans to calm the region.

　　Yet expectations were guarded; the US envoy's previous two truce missions were scuttled by violence.