JERUSALEM (AP) Israel issued an ultimatum yesterday to Yasser Arafat to hand over the assassins of a Cabinet minister or face harsh retribution. In a first step, Israel seized some Palestinian territory and doctors said three Palestinians, including a 12-year-old school girl, were killed by Israeli fire.

Israel did not give Arafat a deadline, but hinted that if its demands were not met, it would launch an all-out attack on the Palestinian Authority.

Palestinian security forces detained three members of a radical PLO faction that claimed responsibility for Wednesday"s killing of Israeli Tourism Minister Rehavam Zeevi at a Jerusalem hotel. However, the Palestinian Authority has never before extradited suspected militants to Israel, and was not expected to do so now.

"We do not receive our orders or directions from (Prime Minister Ariel) Sharon and his government," said Palestinian Information Minister Yasser Abed Rabbo.

The showdown threatens to undercut Washington"s efforts to win broad Arab and Muslim support for its military strikes against Afghanistan, whose Taliban regime is harboring accused terrorist Osama bin Laden, the prime suspect in the Sept. 11 terror attacks on New York and the Pentagon.

After a special session that lasted until early yesterday, Israel"s security Cabinet said Arafat must extradite Zeevi"s killers and those who sent them. The Palestinian leader must also outlaw several militant Palestinian groups that have carried out attacks against Israelis, the Cabinet said.

If Arafat does not meet the demands, Israel "will have no choice but to declare the Palestinian Authority an entity that supports terrorism and act accordingly," the Cabinet statement said.

The statement appeared to be intentionally vague to permit Israel some room to maneuver. In the past year of fighting, Israel has repeatedly shelled Palestinian police stations, entered Palestinian territory and killed suspected militants in targeted attacks. However, Palestinian Authority leaders have been immune from retribution.

Sharon reportedly told the Cabinet that the conflict with the Palestinians has entered a new stage. "As far as I"m concerned, the era of Arafat is over," the Yediot Ahronot daily quoted Sharon as saying. The Maariv daily said Sharon gave Arafat a week to crack down on militants. "If not, we"ll go to war against him," Sharon said, according to Maariv.

The Palestinian Authority announced yesterday that it has uncovered an Israeli plot to assassinate Arafat a claim dismissed by Israel as a fabrication. Arafat adviser Nabil Abu Irdeneh did not provide details about the alleged plot.

Early yesterday, Israeli tanks took up positions in outlying districts of the Palestinian towns of Jenin and Ramallah, drawing Palestinian fire. Troops imposed curfews in the areas they seized, Palestinian witnesses said.

Palestinian Civil Affairs Minister Jamil Tarifi said he saw Israeli tanks moving outside his home. "We can"t get out of the house, and the children are very scared by the sound of the shooting," Tarifi said. Several Palestinian Authority ministries are located in the areas seized by Israel.

In Jenin, shots fired from advancing Israeli tanks hit a classroom in an elementary school, killing a 12-year-old Palestinian girl and seriously wounding a classmate, Palestinian doctors said. The Israeli army confirmed there was an exchange of fire near the school and said it was checking further.

In Ramallah, two members of the Palestinian security forces were killed in an exchange of fire with Israeli troops, witnesses said.