Associated Press An Israeli soldier shouts at waiting Palestinians to stay back as they wait in freezing rain at the Kalandia checkpoint between Ramallah and Jerusalem on Tuesday. Palestinians have to cross the checkpoint one at a time. Israeli forces, fearing Palestinian bombing attacks, remain on high alert on the eve of the Passover holiday.

JERUSALEM - Palestinian officials evacuated key buildings in the West Bank as Palestinian leader Yasser Arafat huddled with top aides yesterday amid fears of an Israeli military response to a suicide bombing that killed 20 people.

Palestinian officials said the Palestinian Authority was considering what they described as a "take-it-or-leave-it" U.S. truce plan that they had essentially rejected earlier this week.

Israeli Prime Minister Ariel Sharon's Cabinet was meeting last night to consider its response to Wednesday night's bombing, which targeted people gathered for a Passover feast in the Mediterranean town of Netanya.

Also last night, suspected Palestinian militants opened fire at Eilon Moreh, a Jewish settlement near the West Bank town of Nablus, seriously wounding at least four residents, rescue workers said. Other details were not immediately available.

Wednesday's bombing was widely seen as a watershed because of its deadliness and timing. "They attacked innocent Israelis on one of the most sacred nights to Jewish people, Passover," said Gideon Meir, an Israeli government spokesman.

Israeli officials stopped short of formally abandoning U.S.-backed truce efforts and suggested they were hoping the Palestinians would, at the last minute, agree to the truce and crack down on militants who oppose ending the 18 months of violence.

But there were also indications Israel was strongly considering military moves even more far-reaching than the incursions into Palestinian towns and refugee camps several weeks ago. That sweep was Israel's biggest military operation in two decades, killed scores of Palestinians and brought on a tide of international condemnation.

Sharon spokesman Raanan Gissin said Israel had made it clear to the United States that it reserved the right to retaliate harshly if Palestinians carried out a major terror attack during cease-fire talks. "Israel will have the full right to self defense and will use appropriate measures to punish all those who perpetrated and assisted in this attack," he said.

Speaking on Israel TV, military affairs analyst Ron Ben-Ishai said senior army officers and Defense Minister Binyamin Ben Eliezer had come up with a plan to send troops into Palestinian territories to capture suspected militants and deter more attacks. The operation, which needs Cabinet approval, would exceed the scope of previous ones but would stop short of a full reoccupation, he said.

In anticipation of a possible Israeli strike, Palestinian government offices were evacuated in the West Bank. In Ramallah, Arafat's West Bank headquarters, worried parents took their children home early from school and residents stocked up on food.

Israeli troops tightened blockades of Palestinian towns across the West Bank and halted Palestinian traffic between the northern and southern Gaza Strip.

Several United Nations foreign staffers, particularly those with young children, left Ramallah, but there was no formal evacuation, U.N. officials said. European Union consulates also advised their nationals living in Ramallah to get out if their presence there was not essential.

U.S. officials said American envoy Anthony Zinni was awaiting a Palestinian response to the bridging proposals he presented on Tuesday.

Israel already accepted Zinni's proposal for a truce timetable - which would require Israel to gradually lift the blockade of Palestinian towns and the Palestinians to end violence against Israel and arrest militants.

The Palestinians have suffered more casualties and economic hardship than the Israelis in the conflict that began in September 2000, but Arafat nonetheless faces strong resistance to ending the uprising without a tangible political gain.

Among the "clarifications" the Palestinians have requested was a request that a cease-fire be linked to the resumption of political talks and, they hoped, a total freeze on Jewish settlement activity.

The Palestinian Authority said it "strongly condemned" Wednesday's bombing, carried out by a member of the Islamic militant Hamas group. Arafat ordered the arrests of key militants from Hamas, Islamic Jihad and the Al Aqsa Martyrs' Brigade, a militia linked to his Fatah movement.

But Israeli officials dismissed that as lip service and said no concrete action had been taken.

In the attack, 25-year-old Abdel Baset Odeh, a Hamas member, walked into the Park Hotel just as about 250 guests dressed in their holiday best were sitting down for the traditional Passover Seder, and blew himself up in their midst.

It was the deadliest Palestinian attack since 22 young people were killed when a Hamas suicide bomber blew himself up at the entrance to a Tel Aviv disco last June.

A Hamas spokesman, Abdel Aziz Rantisi, said the bombing was not an attempt to derail Zinni's mission or an Arab League summit that approved a landmark peace offer to Israel. The group is pledged to Israel's destruction.

The Arab leaders who gathered in Beirut agreed on a Saudi initiative offering Israel "normal relations" in exchange for a return of the territories Israel occupied in the 1967 Mideast war, the establishment of a Palestinian state with east Jerusalem as its capital and a "just solution" for Palestinian refugees.

Gissin said the Arab offer was "a very interesting development, something that should be pursued" - and that Arab states should now enter into direct negotiations with Israel. But Sharon has rejected a complete return of the strategic territories Israel seized in 1967.