TEL AVIV Ñ Prime Minister Ariel Sharon rejected an all-out offensive on the Palestinian Authority in favor of a policy of "active defense" which he described as "guerrrilla warfare against terrorism."

Meanwhile, Israeli security forces have been on alert throughout the weekend for renewed Palestinian bombings. The heightened readiness appeared to pay off in Haifa. Police report that in a roundup of illegal Palestinian laborers one of them admitted to hiding a bomb near an office tower on Sunday in what he said was plans to carry out a suicide bombing.

The bomb was found and dismantled. Israeli officials said they expect additional Palestinian attacks.

"The explosive device was capable of causing great damage," an Israeli police spokesman said.

Sharon told the ruling Likud Party that he has opted for a defensive rather than an offensive stance against the Palestinians. Sharon said this includes an immediate Israeli response to attacks, defense of Israelis in areas under Israeli control in the West Bank and Gaza Strip and the interception of Palestinian fugitives suspected of planning attacks on the Jewish state.

"We faced two possibilities. One: to impose crushing blows on the PA, its leaders, and installations," Sharon said. "Two, we take a different path. What is that different path and what are its components? One is immediate reactions to terrorist attacks. The second is a policy of active defense in Areas B and C, where the special stress is put on securing the roads. That is a special warfare. I would call it guerrilla warfare against terrorism. The third is implementing our right to self-defense, or what is termed, interception actions."

Authorities said the alert continued into Monday as Israeli soldiers came under two attacks in the West Bank. Earlier, Israeli and Palestinian military officers resumed their security dialogue in an effort to implement a ceasefire sponsored by the United States.

Israeli officials acknowledged that security forces have detained a bodyguard of PA Chairman Yasser Arafat. The Palestinian was identified as Lt. Anis Namoura, a resident of Dura, near the West Bank city of Hebron.

Namoura was said to have been sent to Algeria for military training in the assembly of bombs. He told Israeli interrogators that he participated in a July 9 attack in which an Israeli officer was killed.

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