Members of the UN Security Council in New York met behind closed doors into the early morning hours to hammer out a resolution seeking the withdrawal of Israeli forces which rolled into the city yesterday.

Mr Arafat was cornered in a ground-floor office without electricity and water. He was surrounded by Israeli tanks and troops which occupied the seven other buildings in his compound after smashing their way in and arresting more than 70 persons.

Heavy machine-gun fire echoed early today through the centre of Ramallah, where a six-storey building was in flames, sending thick black smoke rising to the sky. Automatic weapons fire and at least a grenade explosion were also heard.

Dozens of Israeli tanks and armoured personnel carrier were deployed across the city. Witnesses reported street battles between Palestinians and Israeli troops but there was no immediate word on casualties.

Mr Arafat put little stock in Israeli assurances that they were out to isolate rather than hurt him in retaliation for continuing Palestinian attacks, including a massive suicide bombing on Wednesday.

The Security Council held both public and private sessions on the Israeli incursion, which dealt another heavy blow to US efforts to broker a ceasefire in 18 months of violence that has claimed more than 1,630 lives.

The UN Secretary-General, Mr Kofi Annan, called on Mr Arafat to accept the US ceasefire terms and demanded that Israel end its assault in Ramallah.