JERUSALEM Ñ Israel expressed dismay and the Arabs satisfaction by a call from G-8 leaders for the deployment of international observers in the West Bank and Gaza Strip.

Egypt and the Palestinian Authority said the G-8 call was urgent considering the escalation of violence in the Palestinian areas. They called on the observers to ensure that Israel's military ends attacks on Palestinian positions.

"The Palestinian leadership favorably welcomes the decision by the G-8 summit and calls for its swift implementation as well as a mechanism to assure the smooth operation of the observer mission," the Palestinian leadership, composed of the PA Cabinet and senior PLO officials, said in a statement after a meeting on early Sunday.

In contrast, Israeli officials said the government was dismayed by the G-8 call for international observers. The government of Prime Minister Ariel Sharon has rejected international personnel, but has left open the prospect of U.S. observers. The United States has agreed to send its own contingent.

On late Saturday, Sharon's office said Israel will not drop its opposition to international observers. "The Israeli position has not changed," the statement said."

In a statement, the G-8 called for the stationing of observers in an effort to implement the Mitchell report. "The situation in the Middle East presents a grave danger,'' the G8 leaders said. "Too many lives have already been lost. We cannot stand by while the situation deteriorates."

In Gaza, Palestinian sources said a man was killed in an Israeli shelling attack on late Saturday. Earlier, in the West Bank city of Hebron, a member of Arafat's ruling Fatah movement was killed in an explosion in Fatah headquarters on late Friday. Ten others were said to have been injured.

In Nablus, two members of the Popular Front for the Liberation of Palestine were injured in a blast. In both cases, Palestinians blamed Israel for the bombings.

Israeli sources said the explosions in Hebron and Nablus took place during the assembly of bombs by Fatah and the PFLP.

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