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TYPE=BACKGROUND REPORT

BYLINE=SONJA PACE

DATELINE=JERUSALEM

/// EDS: THE FOLLOWING TRANSCRIPT IS FROM A PHONER BY SONJA PACE WHO TRAVELED TO RAMALLAH TODAY TO GET A SENSE OF THE SITUATION IN THE WEST BANK CITY WHERE TWO ISRAELI SOLDIERS WERE KILLED AND ISRAELI HELICOPTERS RESPONDED WITH ROCKET ATTACKS AGAINST PALESTINIAN FACILITIES. ///

MS PACE: We certainly saw an escalation of the unrest today, by mid to late afternoon we were seeing Israeli helicopter gunships and Israeli tanks around Ramallah. The helicopter gunships were shelling Ramallah, they shelled a police station and they were also shelling near Chairman Arafat's headquarters in Ramallah. There was also shelling in Gaza.

So this is a definite escalation we have seen. The incident that sparked all of this was the killing of two Israeli soldiers early today (Thursday) by a mob in Ramallah and apparently what we were able to glean by talking to people in the Israeli military as well as people in Ramallah was two Israeli soldier, presumably took a wrong turn somewhere and ended up at a Palestinian checkpoint in Ramallah or near Ramallah.

The Palestinian police picked them up and were taking them to police headquarters to question them. There was a demonstration going on that had been for a funeral. Somebody killed in the unrest earlier and so there were thousands of people on the street. These people saw that the police were transporting Israeli soldiers, it literally became a mob. We even saw this on local television here and eyewitnesses told us about it later as well. They (the mob) overwhelmed the Palestinian police and they did kill the two Israeli soldiers.

By the time we got to Ramallah it was around midday, and you could just feel the tension in the air. It was, sometimes it was just very oddly quiet. All the shops were closed in the center of town there were very, very few if any women or children on the street, but we saw a lot of uniformed policemen and security forces with weapons, Palestinian security forces and a lot of young men, I would say anywhere aged between 15 to 25 and up, many of them with weapons.

And it seemed like they were waiting. They knew something was going to happen. A couple of eyewitnesses told us what had happened at this police station. We went up to the police station, there was blood on the outside of the window there where apparently one of the bodies of the Israeli soldiers had been dragged out of the window.

There was just so much tension in the air at that time that it was clear that it was clear that something was going to happen and people there, police there were saying we know that the Israelis are going to attack and they were definitely expecting something. There was an ambulance already waiting in the center of town. There were young men gathering in the circle in the center of Ramallah. There was chanting going on and it almost seemed, it really does seem now from both sides that you've got so much tension and so much distrust and accusations being hurled from one side to the other. The Palestinians clearly feeling in Ramallah that the Israelis started all of this and that it is the Israelis who attacking the Palestinians and the Palestinians are just reacting and many times just defending themselves.

The Israelis on the other hand say look this is what is happening. It is the Palestinians, all of this unrest over the past two weeks, the Israelis believe, have been very carefully orchestrated by the Palestinians by Mr. Arafat, who for his own political ends and to try to gain greater concessions from the Israelis in the peace talks.

NEB/KBK