Britain has appealed for restraint from all sides in the Middle East peace process.

Downing Street issued the call following a warning by Israel that it was considering assassinating the Palestinian leader Yasser Arafat.

"It is important that everyone exercises restraint in what they say," said Number 10, adding Britain's views had been made clear in private to both sides.

Israel's deputy prime minister Ehud Olmert told a radio station at the weekend that removing Arafat had become a key goal - putting him in the same category as Hamas.

"His expulsion is an option, his liquidation is another option. It is also possible to confine him to prison-like conditions," Olmert said.

Number 10 urged both sides to ease the inflammatory statements and step back from the brink following the latest round of terrorist attacks and revenge missions by the Israeli army.

"The prime minister recognises these are difficult times in the Middle East," said the official spokesman.

"Raising the rhetoric is not necessarily a good way of making progress. It is important that everybody focuses on the solution which everybody wants."Britain's statement followed swift condemnation by US secretary of state Colin Powell who revealed Washington had told the Israelis it did not support "either the elimination or the exile of Mr Arafat".