JERUSALEM (Islamweb & News Agencies) - A U.S. envoy was to push ahead with efforts to reconcile warring Israelis and Palestinians on Monday, as the intifadha threatened to explode into regional conflict.David Satterfield was due to hold talks with Palestinian President Yasser Arafat about ways of stopping the fighting which killed a Palestinian child and wounded at least 29 people on Sunday.
Satterfield, deputy assistant secretary of state for near eastern affairs, met Israeli Foreign Minister Shimon Peres on Sunday while the bloodshed that has stained over 10 months of a Palestinian uprising against Israeli occupation continued to rage.
In northern Israel, a Palestinian Resistance bomber killed himself and wounded 15 people at a cafe. In the West Bank flashpoint of Hebron-Al-Khalil, Israeli occupation soldiers shot dead an eight-year-old Palestinian girl during a firefight with Palestinian Resistance men.
The explosion in the Wall Street cafe in the town of Kiryat Motzkin, north of the city of Haifa, followed an attack in Jerusalem on Thursday in which 15 people were killed as well as the Palestinian bomber. (Read photo caption below)
The European Union's foreign policy chief Javier Solana reiterated the EU's condemnation of acts of violence in a telephone call to Peres, Solana's spokesman said.
During the call, Peres renewed an Israeli demand that Arafat arrest Palestinian militants involved in mounting attacks against Israel.
The United States also urged Arafat to rein in what it calls the violence.
``The Palestinians have a responsibility to reduce the level of violence that is conducted by these bombers,'' White House Chief of Staff Andrew Card told Fox Television, hours before the latest bombing.
But he also reiterated the U.S. charge that the Israeli seizure of Palestinian institutions in Arab East Jerusalem, in retaliation for the bombing in West Jerusalem on Thursday, constituted ``political escalation.''
Israel captured East Jerusalem in the 1967 Middle East War and annexed it in a move not recognized internationally. It views all of Jerusalem as its capital, but Palestinians want the eastern part as the capital of their future state.
Israeli soldiers wounded another 12 people in Hebron-Al-Khalil, when they traded fire with Palestinian Resistance men. The army said two border police had also been hurt in the firefight.
EGYPT BLAMES ISRAEL FOR BOMB
Egyptian Foreign Minister Ahmed Maher blamed Israeli policy toward the Palestinians for the bombing on Sunday.
``Israeli policy is what leads to acts such as these,'' Maher told reporters in Cairo. ``Such acts are the result of Israeli policies that create frustration among the Palestinian people and block the door to hope for a political settlement.''
In the West Bank city of Ramallah, Arafat met Palestinian factions to discuss Israel's reoccupation of the East Jerusalem buildings.
``This aggression pushes the situation toward a comprehensive explosion... (We) call on the Israeli government to revoke the occupation,'' Arafat said at the end of the meeting.European Union envoy Miguel Moratinos was due to arrive in the region on Monday.
Amid the diplomatic efforts to prevent the violence from escalating further, the Islamic militant group Hamas said the Palestinian Authority had arrested four of its members, one of whom Israel believes sent the bomber to Jerusalem on Thursday.
But Israel said the arrests did not go far enough.
Later it said the Palestinian Authority had released three Hamas activists linked to a bomb attack which killed 20 at a disco in Tel Aviv in June.
BLAST RETALIATION FOR ISRAELI ``AGGRESSION''
After the Sunday blast in the cafe, Khalim Izz Eddin, the head of the militant Palestinian group Islamic Jihad in the West Bank town of Jenin, said the strike constituted revenge.
``This incident comes as retaliation for the Israeli aggression against our people and the assassination of our leaders and innocent people,'' said Abdel Khalim Izz Eddin.
Before the bombing, Israeli Prime Minister Ariel Sharon gave Foreign Minister Shimon Peres the go-ahead to hold talks with the Palestinians on implementing a U.S.-brokered cease-fire between the sides that never took hold.
``Sharon allowed Peres to undertake a dialogue with the Palestinians only regarding the cease-fire... and they agreed there would be no negotiations about political solutions as long as the violence continues,'' an Israeli political source said.
Sharon has refused to hold political talks with the Palestinians until what he calls all forms of violence end.
But Palestinian officials said the move would be meaningless unless Israel vacated nine Palestinian offices it took over in and around Arab East Jerusalem following the bombing in Jerusalem on Thursday.
``There's nothing new in Peres having talks with us. Peres met senior Palestinian officials including President (Yasser) Arafat many times. What we want is for Sharon to revoke his latest orders,'' Palestinian minister Saeb Erekat told Reuters.
At least 516 Palestinians, 147 Israelis and 14 Israeli Arabs have been killed in the fighting since last September.
Israel has demanded that Arafat's Palestinian Authority detain militants Israel blames for the violence. Israel last week published a most-wanted list of seven Palestinians who it demanded be arrested immediately.
The PA refuses to make random arrests.
PHOTO CAPTION:
Israeli policemen search the scene where a Palestinian bomber killed himself and wounded 15 people at a restaurant in Kiryat Motzkin, August 12, 2001, the second such attack in the Jewish state in four days. The blast at the Wall Street restaurant in the town, south of the port of Haifa, followed an  attack in Jerusalem last week in which 15 people were killed by a Palestinian bomber who also blew himself up. (Roni Schutzer/Reuters)