The Israeli security cabinet approved in principle Thursday night the expulsion of Arafat as a rapid response to two suicide bombings earlier in the week.

That sparked a spontaneous outpouring of support for the 74-year-old leader on the streets of the West Bank and Gaza Strip, with Arafat vowing he would never be taken alive.

The Israeli decision also prompted firm condemnation from key global players, with the United States, European Union, France, China and Russia, backers of the Middle East peace "roadmap", speaking out firmly against any move to expel Arafat.

UN Secretary General Kofi Annan warned yesterday that it would be "unwise" to expel Yasser Arafat, following the Israeli government's decision to banish the Palestinian leader.

The Arab League said expelling Arafat would be disastrous, and there were numerous calls around the region for like-minded countries to intervene to prevent his removal. Israel's neighbour Egypt said it could unleash violence all over Palestinian territories. Jordan and Yemen voiced similar concerns.

A senior US administration official said Washington will not work with Arafat but opposes expelling him because that would only give him "a wider international stage."

"Our position on this is well known, longstanding and unchanged," the official told AFP on condition of anonymity. "It is unhelpful and it is not the solution."

Asked whether the White House had communicated its objections to Israel, the official replied: "They understand our position; they know what we think about this."

Israeli Prime Minister Ariel Sharon had earlier chaired a security cabinet meeting in the aftermath of the killing of 15 Israelis in two suicide bombings carried out by Hamas militants near Tel Aviv and in Jerusalem on Tuesday.

Israel, which has staged a series of air strikes against Hamas in Gaza recently, has accused Arafat of giving the green light to militant attacks.

"The events of these last few days have proved again that Yasser Arafat is an absolute obstacle to all attempts at reconciliation between the Israelis and the Palestinians," said a government statement after the meeting.

"Israel will act to remove this obstacle in a manner and at a time which will be decided afterwards."

According to a government source, the decision had effectively given a green light to the army to expel Arafat when it sees fit, though Israel has not said if, when or how it might act.

A defiant Arafat, who has been confined to his headquarters in the West Bank town of Ramallah for the past 20 months, vowed: "No one can kick me out. They can kill me kill me with bombs but I will not leave."

French President Jacques Chirac said at a news conference in Spain: "I consider President Arafat the legitimate representative of the Palestinian Authority and I think it would be a serious mistake to seek to eliminate him politically."

The European Union said exiling Arafat would likely escalate Israeli-Palestinian tensions. Russia said expelling him would "wipe away the prospects of a peaceful settlement."

Russia said the move to expel Arafat would be a "serious political mistake with the most negative consequences."

"Such a step would remove the possibility of peacefully resolving the Israeli-Palestinian crisis and would lead to an uncontrollable chain of events in the worst case scenario," said a statement from Russia's foreign ministry.

And in Sydney, Australian Foreign Minister Alexander Downer said: "I think the Israelis would be well advised to leave Arafat in place and to deal as best they possibly can with the new Palestinian prime minister, who is well known to us and is a very good man."

But Palestinian prime minister-designate Ahmed Qorei threatened to call off efforts to form a new government after the Israeli decision, saying the move would make the composition of a government an "issue without substance".

Arafat was hailed by thousands of supporters as he ventured out of his headquarters after the cabinet decision.

He was carried on a chair by his bodyguards, blew kisses and gave the victory sign after up to 3,000 supporters entered the Muqataa complex.

"With our blood and our souls we will support you, Abu Ammar," the crowd chanted, using Arafat's nom de guerre.

Arafat also joined in the chanting over a loudhailer when they chanted: "With our blood and our souls we will support you Palestine."

More than 5,000 people also took to the streets in central Gaza City to demonstrate their support for Arafat after Islamic and nationalist factions had urged them by loudspeaker to gather.

Hundreds of gunmen opened fire into the air, shouting "Sharon go to hell", "Abu Ammar we will defend you forever" and "Revenge, Revenge".