By continuing to destroy Palestinian houses, confiscate land, and increase its hold over Jerusalem, the Israeli Government risks driving the Palestinian population to extremes, Palestinian leaders have warned.

``The latest actions of Israeli Prime Minister Benjamin Netanyahu constitute a declaration of war,'' the chief Palestinian official in East Jerusalem, Faisal Hussein said. ``The peace process is dead in the hands of Netanyahu.

The Palestinians must prepare Arab and international public opinion for the explosion to which this could lead and, at the same time, they must prepare themselves.''

Palestinian leaders argue that Israel is sapping the strength of the Palestinian Authority to control the street. ``The Palestinian citizens have less and less confidence in the abilities of the Palestinian Authority in the faceof the limited and arrogant policy of Netanyahu,'' said Hassan Asfour, a principal Palestinian negotiator with Israel.

``For that reason, the capacity of the Authority to control the situation is very limited,'' he said.In a statement released Tuesday, the Palestinian Legislative Council highlighted the ``seriousness of the situation and the possibility that an explosion could take place at any moment''. The deputies urged Palestinian Authority President Yasser Arafat to ``take another close look at the status of negotiations with the Israeli government''.

``The Palestinians cannot continue to put faith in an (autonomy) accord from which the Israeli government is sapping the strength each day,'' the statement said.

Israeli-Palestinian peace negotiations have been deadlocked for more than 15 months, despite efforts by the United States to restart them. The Americans have asked Israel, so far in vain, to pull back from 13 per cent of the West Bank in order to kickstart the peace process. The IslamicResistance Movement (Hamas) rejects the Oslo accords signed by Arafat with Israel, saying they barter away the rights of Palestinians to their land. The armed branch of Hamas is responsible for most of the anti-Israeli attacks which have killed dozens of Israelis during the last years.