Ariel Sharon told his stunned country Monday he was determined to reach a peace deal and end 36 years of rule over the Palestinians. The speech marked the first time the veteran hawk, who had long argued that a Palestinian state would pose a mortal danger to Israel, publicly used the word **"occupation"*** to refer to Israel's presence in West Bank and Gaza Strip. The word is anathema to the Israeli right, which believes Israel has a legitimate claim to the West Bank and Gaza for religious and security reasons. "To keep 3.5 million people under occupation is bad for us and them," Sharon told angry conservatives in his Likud Party in remarks broadcast on Israel Radio. Palestinians claim all of the West Bank and Gaza for a state. On Sunday, Sharon's Cabinet conditionally approved the U.S.-backed "road map," a three-phase plane that begins with a halt to violence and envisages a Palestinian state in the West Bank and Gaza Strip in 2005. Sharon's remarks indicated his surprising turnaround could be genuine. The ex-general was nicknamed "the bulldozer" for ramming West Bank settlement programs through successive Cabinets, and once argued that giving up even 13 percent of the West Bank and Gaza would endanger Israel's security. "This can't continue endlessly. Do you want to remain forever in Ramallah, Jenin, Nablus?" he asked his party's lawmakers, listing towns in the West Bank. The Cabinet's approval of the road map plan, coupled with a list of conditions, was carefully worded to allow Israel to dodge measures that are toughest for Sharon's government to accept. Palestinians, who already accepted the plan, insisted it must be implemented unchanged. In his remarks Monday, Sharon left himself a way out. "What will happen if Palestinian terror continues? Nothing. Nothing will happen. The Palestinians will get nothing," he told the lawmakers. Critics have said Sharon's long-held condition that all violence must stop before peace moves forward is unrealistic and guarantees the stalemate will continue. Israeli Foreign Minister Silvan Shalom also warned Arab neighbors Monday it will never accept the return of Palestinian refugees or their descendants to its territory under any peace settlement. "There will be no way refugees will be settled in the state of Israel," Shalom told reporters at a European Union meeting with Mediterranean states in Greece. He urged Arab states to accept the refugees and their families, estimated at some 4 million, on a permanent basis. The road map says that the two sides must negotiate over the refugee issue toward the end of the peace process. Still, Israel's conditional acceptance of the "road map" left some Arab leaders cautiously hopeful. "We are on the verge of peace," said Jordanian Foreign Minister Marwan Muasher. "We believe the road map is very clear. Jordan is ready to do its part in a good faith manner." Officials began preparing for a meeting in the coming days between Sharon and Palestinian Prime Minister Mahmoud Abbas, their second in 10 days. Palestinian officials, speaking on condition of anonymity, said the meeting would take place Wednesday evening at Sharon's office. That could clear the way for a summit with President Bush as early as next week, possibly in Jordan. Sharon faced withering criticism from members of Likud who said the road map favored the Palestinians and endangers Israel. Yuval Steinitz, a leading Likud member, said Sharon ignored the negative parts of the plan. "I think that Arik is very uncomfortable with the road map," Steinitz told The Associated Press, using a nickname for Ariel. He said Sharon was unable to withstand international pressure to endorse the plan. In violence Monday, Israeli troops killed a Palestinian teenager and another surrendered after infiltrating from Gaza, the military said. They were unarmed and apparently looking for work. In a village near the West Bank town of Qalqiliya, an 11-year-old Palestinian boy was also killed during an exchange of gunfire with Israeli troops, Israel Radio reported. Some believe Sharon's startling reversal is genuine. "Often he says to me, 'Ten years ago I wouldn't do this or say this,'" political analyst Shimon Shiffer told Israel TV. "He reached the realization that at the age of 75, he's the man that finds himself at this intersection, that he and only he can do this." Others said Sharon had never been a true ideologue of the right. "Sharon is a pragmatist," said Efraim Inbar, director of the Begin-Sadat Center for Strategic Studies at Tel Aviv's Bar Ilan University. "He is capable of change when circumstances require." Liberal lawmaker Yossi Sarid argued Sharon was trying to keep his intentions murky so the U.S. government could assume he was committed to the plan, while his hawkish allies could assume he was just making a tactical move to end U.S. pressure. "Ariel Sharon likes to walk in the fog, because then no one knows where he is headed," Sarid wrote in the Yediot Ahronot daily. **Israeli Troops Shoot at Foreign Diplomats*** Meanwhile Israeli troops shot at a convoy of diplomatic vehicles at a military roadblock in the Gaza Strip on Monday, twice hitting the windshield of one of the cars but causing no injuries, diplomatic sources said The diplomats were badly shaken by the incident as the small convoy was stopped leaving the town of Beit Hanoun in northern Gaza, close to the main Erez crossing with Israel, the sources said. They said the convoy included representatives of Switzerland, Britain, Greece, Sweden, and Austria. A Swiss Foreign Ministry spokesman said its representative to the Palestinian Authority and a colleague had come under Israeli fire at a Gaza roadblock on Monday but was unhurt. It said his armored vehicle was clearly marked as a diplomatic car and it was unclear why it was shot at. He was held up for about an hour before being allowed to proceed. The spokesman said the ministry was looking into the incident and "demands a comprehensive investigation" by Israel. The Israeli army 'declined' to comment. Military sources said the army had closed the entrance to Beit Hanoun because of "warnings of attempts by terror organizations" to leave the town. "There were a number of vehicles in a traffic jam trying to leave Beit Hanoun. Some of the vehicles tried to bypass the roadblock and shots were fired into the air to deter them and restore order. The claim of hits on a diplomatic car is being checked by the army now," one military source said. The army launched a raid into Beit Hanoun earlier this month, which it said was intended to prevent Palestinian militant groups firing rockets from the town into nearby southern Israel. The Palestinians have been waging an uprising for an independent state since September 2000. **PHOTO CAPTION*** Israeli army soldiers search Palestinians trying to enter Tulkarem in the northern West Bank Saturday May 24, 2003. (AP Photo/Anja Niedringhaus)