Egypt will limit its contact with Israel's government, but would not completely close diplomatic channels -- a move that comes as anger grows in the Arab world over Israel's deepening incursions into Palestinian-held territory.

Israeli troops exchanged gunfire with Arafat's security guards in the Ramallah complex, wounding 25 of the leader's bodyguards. Five Palestinians and one Israeli soldier were killed in the fighting, according to hospital officials.

Israeli Prime Minister Ariel Sharon said Tuesday conditions were "not yet ripe" for lifting a travel ban on Yasser Arafat, despite U.S. pressure to allow the Palestinian leader to travel to an Arab summit in Beirut.

On one of the deadliest days in 17 months of renewed fighting, Israeli troops on Friday killed 33 Palestinians during raids on refugee camps and villages and a Palestinian gunman killed five Israeli students at a Bible study hall.