The prime minister has said Britain is prepared to work with the Palestinian Authority to halt the "catastrophic" events in the Middle East.

The comments came as hopes of progress on a peace deal were dealt a further blow by a Palestinian suicide attack which killed 15 Israeli civilians.

Tony Blair condemned the latest "appalling outrage" and noted that 100 Israelis had now been killed since the beginning of March.

While accepting that "many hundreds" of Palestinians had also died, Blair said that the Palestinian leadership must take action to prevent further attacks.

"We are prepared to work with the Palestinian Authority in any way that is possible in order to make sure that they have the proper security apparatus that they require and that that is properly enforced through the Palestinian Authority," said Blair.

"We cannot have a situation where every time it seems as if there is some hope of political progress then that progress is immediately derailed by a terrorist attack."

He warned that without confidence-building measures, peace talks could always be undermined by extremists.

"I think now the most immediate task is to make sure we have in place proper security measures within the Palestinian Authority that allows Israel some confidence that if they start to talk they are not to carry on suffering these appalling outrages for which there can be absolutely no justification whatever."

Blair's comments came after Labour backbencher Jeremy Corbyn urged the government to cease all arms sales to Israel.

Conservative MP John Butterfill welcomed moves towards more dialogue.

He questioned whether the PA had been implicated in the "funding and organisation" of terrorist atrocities.

Blair said the government would study the Israeli government's documentation - adding that there should also be "some means" to properly adjudicate on claims that the authority was involved in terrorism.

"The immediate task is to try and find some way of ensuring there is a verifiable security apparatus in place inside the Palestinian Authority and its territories," said Blair.

"It is a tragedy that is now pretty much a catastrophe, not just for that region but for the world."

Tuesday's attack on a pool club in a small town outside Tel Aviv followed progress on ending the Israeli siege of Yasser Arafat's Ramallah headquarters and moves towards a compromise on ending the siege at the Church of the Nativity in Bethlehem.

However, Ariel Sharon cut short a visit to the United States following the attack.

In a bid to prevent Israeli reprisals, Arafat condemned the attack and said he was ordering Palestinian security forces to "confront and prevent all terrorist operations against Israeli civilians from any Palestinian group".