Palestinians Angry At U.S.

President Bush's strong endorsement of Israel's "disengagement plan" lifted support Thursday for Prime Minister Ariel Sharon but left angry Palestinian leaders scrambling to galvanize international opposition to the U.S. stance.

"I don't think that he should reward the Israeli illegal actions of stealing Palestinian lands to build settlements," Palestinian cabinet minister Saab Erekat told CBS News Correspondent Robert Berger.

Erekat said it's as if he would come to President Bush and tell him that "Texas is a part of China."

At a White House meeting with the Israeli leader Wednesday, Mr. Bush expressed support for Sharon's plan to withdraw from all of Gaza and a handful of West Bank settlements.

While voicing support for an independent Palestinian state, the president also gave unprecedented U.S. backing for Israel to hold on to major settlement blocs in the West Bank. He also ruled out allowing Palestinian refugees to return to Israel after a Palestinian state is created.

Those concessions enraged the Palestinians, who want an independent state in all of the West Bank and Gaza, which Israel captured in the 1967 Mideast war.

Palestinian leaders held a series of urgent meetings in a desperate effort to gather international support amid fears their government was on the verge of collapse.

In other developments, Israel's attorney general has ordered a freeze on the transfer of government funds to Jewish settlements in the West Bank, on grounds that the money is being transferred to illegal outposts. The U.S.-backed "road map" peace plan calls for all 100 outposts to be dismantled.

The timing is no coincidence, reports Berger: It allows Sharon to show the president that he is taking positive steps toward peace.

West Bank settler leader Pinchas Wallerstein denied there were any illegal transfers of money. Mazuz's order was an attempt to "delegitimize the settlers," Wallerstein told Israel Radio.

Palestinian leaders appealed to the international community to support a negotiated solution based on the 1967 borders and the road map.

Longtime Palestinian leader Yasser Arafat declared Thursday that the Palestinian people will not give up on their goal of an independent state with Jerusalem as its capital. He added that Palestinians have the right to return to Israeli territories.

"Israeli crimes will be faced with more resistance to force occupiers, herds of settlers to leave Palestinian land," Arafat said at a press conference following an emergency meeting of Palestinian leaders. "Israel will not achieve security through occupation, arrogance and assassinating our leaders."

Palestinian Prime Minister Ahmed Qureia told associates he was considering resigning, saying that Mr. Bush had undermined the negotiating process. But Qureia has threatened to step down in the past, and it was unclear whether he would follow through this time.

On Wednesday, Qureia harshly criticized President Bush's stand. "He is the first president who has legitimized the settlements," he said. "We as Palestinians reject that." Qureia objected to the unilateral nature of Israel's planned moves, which ignore the Palestinians.

The Islamic militant groups Hamas and Islamic Jihad also denounced Mr. Bush's statement.

Hamas leader Abdel Aziz Rantisi said the U.S. president had "put an end to the illusions" of a peaceful solution. "This American statement came as a part of the American declared war against Islam and is in harmony with the American terrorism against our people in Iraq."

An Islamic Jihad spokesman said Bush's statement was "a declaration of war against the Palestinian people."

Sharon got just what he wanted from President Bush, reports Berger. He can now return home and tell his hawkish opponents that he got a quid pro quo for his plan to dismantle 21 Jewish settlements in the Gaza Strip. Sharon faces a binding referendum on the Gaza plan in his Likud party next month — and now, he appears to have the upper hand.

"Sharon: The Great Achievement," read the main headline in Yediot Ahronot, the country's largest newspaper, above a photo of a smiling Sharon and President Bush.

A poll commissioned by Israel Army Radio showed growing Likud support for the plan. It said 57 percent of Likud voters plan to vote in favor and 35 percent against. Earlier polls had given Sharon barely 50 percent support. No margin of error was given.

"This poll, in my opinion, represents the true mood of the Likud voters. Likud voters are responsible and want a result like this," Vice Premier Ehud Olmert, a close Sharon confidant, told Army Radio.

Hard-liners oppose evacuating settlements in principle have labeled Sharon's plan a "reward for terrorism" that would spur more violence.