Arafat was speaking to reporters yesterday at his battered headquarters in Ramallah hours after a Palestinian gunman infiltrated a Jewish settlement in the West Bank, killing a settler and wounding his 12-year-old daughter before soldiers shot the attacker dead.

In interviews with Israeli newspapers on Friday, Sharon had issued his most explicit threat yet against Arafat, calling the Palestinian leader a poor insurance risk.

"I don't care for it. I am caring for my people, for our children, for our women, for our students," Arafat, speaking in English, said in his first response to Sharon's remarks.

The United States criticised

Sharon's comments, but Israel's Internal Security Minister Tsahi Hanegbi defended the prime minister's remarks yesterday and noted that US forces had killed militants in Iraq and Afghanistan.

Sharon, who is under fire in Israel over his plan for a unilateral Gaza pullout and over a bribery scandal, singled out Arafat and Sheikh Hassan Nasrallah, leader of Lebanon's Hizbollah guerrilla group, in his media interviews.

"I wouldn't suggest either one of them should feel secure. I wouldn't propose that any insurance company give them coverage," Sharon told Israel's Haaretz daily.