TEL AVIV Ñ Israeli Prime Minister Ariel Sharon had hours to decide yesterday on a plan to invade Palestinian areas Monday in response to a Palestinian suicide bombing attack that killed 20 Israelis.

Sharon convened his senior ministers on Sunday to discuss options for an attack on the Palestinian Authority as U.S. Secretary of State Powell called on Israel not to retaliate. Israeli officials dismissed a pledge by PA Chairman Yasser Arafat to stop the violence and did not rule out an invasion on Monday. The officials said Arafat has already evacuated all installations, eliminating many targets for Israel.

Overnight Sunday, however, Palestinian gunners continued to fire on Israeli communities and military posts in the West Bank and Gaza Strip.

Sharon discussed the issue on late Saturday with U.S. Secretary of State Colin Powell. Both men cancelled foreign tours amid the escalating tension.

Arafat's Fatah movement met on late Saturday and called on Palestinians to prepare for an Israeli invasion of PA areas. PA radio urged Palestinians to shut off gas and electricity and store food for what officials termed an impending attack.

"The [proposed] operation is to ensure that there will not be terror," Israeli Deputy Prime Minister Silvan Shalom said minutes before the Cabinet meeting. "We are not looking for the collapse of the PA."

Israeli officials said the borders with Egypt and Jordan have been sealed and Palestinian workers have been expelled from Israel. For the first time, they said, Arafat will not be able to leave PA areas.

Israeli officials said Sharon is giving Arafat no more than several hours until Israel responds. They said Sharon expects Arafat to end all attacks and round up Islamic fugitives released from PA prisons.

A Palestinian bomber blew himself up and killed 20 Israelis outside a Tel Aviv nightclub in the bloodiest attack in the more than eight-month-old Israeli war with the Palestinians.

Another four people are described in criticial condition in a Tel Aviv hospital. In all, more than 50 people were injured.

Israeli officials blamed Palestinians for the bombing on late Friday. The military was not ordered to respond to the attack. Tel Aviv youngsters stoned a nearby mosque on Saturday.

Leading Israeli Cabinet ministers met on Saturday to discuss the attack amid a declaration by Palestinian Authority Chairman Yasser Arafat that he was ready to declare a ceasefire. Officials said Prime Minister Ariel Sharon, Defense Minister Binyamin Ben-Eliezer and Foreign Minister Shimon Peres decided to give Arafat until Sunday afternoon to determine whether the Palestinian leader has implemented his pledge.

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