Violence erupts in Israel

At least 15 Palestinians were wounded in an Israeli helicopter gunship attack at a refugee camp today.

Israel launched the attack during a raid by troops and 25 tanks on a Gaza camp to repel a crowd of armed militants it claimed were threatening its own soldiers.

Four Palestinians were in a critical condition, according to doctors at the local hospital. Palestinian witnesses claimed civilians were among the victims. One, Abu Jazar, said a "sparkle came out of the sky with a big boom and people behind me were falling down".

Israeli officials said the crowd was attempting to stop a search for tunnels used to smuggle terrorist weapons.

The action will give a new headache to Tony Blair, who is braced for a Labour backlash today against his own cautious backing for the controversial new Israeli peace plan.

In a surprise U-turn, Mr Bush tore up his own "road map" for peace in the Middle East to hail the new carve-up of land proposed by Israeli prime minister Ariel Sharon.

Under the new terms, Israel would permanently annex settlements seized after the 1967 Six-Day War - land which had previously been expected to pass to a new Palestinian state.

Mr Bush also dismissed the idea of a "right to return" for Palestinian refugees to former homes in Israel. Praising the courage of Mr Sharon, he said a new map was needed because the "realities" in the region had changed.

Mr Blair gave a guarded welcome to the moves last night, calling on the international community to "seize the opportunity" to inject new life into the stalled peace process.

But the reaction from Arab leaders was uniformly hostile. Palestinian president Yasser Arafat said the blueprint would wreck any hope of peace and added the plan would lead to a "cycle of violence".

The Palestinian prime minister, Ahmed Qurei, said the plan "kills the rights of the Palestinian people". He accused Mr Bush of giving himself "the right to make concessions on behalf of the Palestinians", adding "we cannot accept this under any circumstances". He added: "He is the first president who has legitimised the settlements in the Palestinian territories when he said that there will be no return to the borders of 1967."

At the United Nations, secretary-general Kofi Annan expressed dismay at "unilateral"-action by the US and Israel. His spokesman said the issues should be discussed by all the parties and added: "He strongly believes that they should refrain from taking any steps that would pre-empt the outcome of such talks."

Mr Bush's endorsement of the Israeli plan was being seen as a stunning coup for Mr Sharon after two hours of talks at the White House. It will be popular among both Jewish voters and Right-wing Christian elements in the US, whose support is vital for the Bush re-election campaign.

Mr Sharon's " disengagement" blueprint envisages Israel uprooting all settlements on the Gaza Strip but keeping six settlement blocs in the West Bank.

Mr Bush described the settlements as "major new Israeli population centres" and insisted the plan could provide a breakthrough.