Background: On the Ground

LINDSEY HILSUM:

Israeli commanders on the rooftops overlooking the Church of Nativity in Bethlehem. At dawn this morning, smoke was still rising from a fire in the compound, which started during shooting in the night. Two Israelis were wounded, and one Palestinian killed. The Israeli army says Palestinian gunmen fired first from the church. But we spoke by phone to the governor of Bethlehem, who's inside the church. He said Israeli commandos tried to break in through the roof, and the grenade they threw started the fire. The Israelis searched Palestinian firefighters before letting them extinguish the blaze.

This morning we found the streets leading up to Manger Square shattered and almost deserted. Only a few dare pick their way through the wreckage of the Israeli onslaught. And the Israeli snipers are still around. This afternoon, the Israelis briefly lifted the curfew, but only in part of Bethlehem. Anyone out on the wrong side of the line quickly learned their mistake. There's been shooting to the right of me, down this road down here. It seems that the Israelis are trying to warn the Palestinians in Bethlehem that they should go back into their houses, they should not come outside. Nonetheless, everyone came out into the streets for a few hours to go shopping, just to get out of the house, to talk to their neighbors.

LINDSEY HILSUM:

As the director of the Peace Center, what are you (gun fire)… what are you telling people here in Bethlehem that they should do?

MICHAEL NASSER, Bethlehem Peace Center:

I'm telling people to hold on, this is not going to last forever. If we lose part of our people, we will still stay and Palestine will always remain.

LINDSEY HILSUM:

In the Knesset in Jerusalem, the Israeli Prime Minister showed parliamentarians documents he said proved that Yasser Arafat finances suicide bombers.

ARIEL SHARON, Prime Minister, Israel (Translated):

Arafat has established in the territories under his control a regime of terror that, in an organized and an official manner, trains terrorists, finances, equips and arms them and then sends them to murderous operations and activities in Israel.

LINDSEY HILSUM:

Troops did pull out of the village of Yatta today near Hebron. But elsewhere, fighting is more intense than ever. Tonight, as the extent of the destruction becomes apparent, the U.S. Envoy, Anthony Zinni, went to see Mr. Sharon to say George Bush says, "Stop now." But most Israelis support the continued assault on the West Bank. They see Palestinians captured and think, "This makes our lives safer." "Each one could be a potential suicide bomber." At Nablus, where fighting was intense in the Central Casbah, dozens of Palestinians surrendered today. Ariel Sharon believes "Operation Protective Wall" is working.