JERUSALEM, March 26 -- Yasir Arafat declared today that he would not attend an Arab summit meeting in Beirut after Prime Minister Ariel Sharon of Israel said he wanted the right to prevent Mr. Arafat from returning to the West Bank. "To my regret, the conditions have not ripened yet for Chairman Arafat's departure for Beirut," Mr. Sharon said in an interview on the Arabic-language news program on Israeli television. The Palestinian leadership responded in a statement that, "President Arafat and the Palestinian people refuse to submit to this threat, aggression and blackmail.

"In this dangerous situation, President Arafat and the Palestinian leadership decided that Abu Amar stay with his steadfast people in order not to give the Israeli government an opportunity to put obstacles in the way of his return." Mr. Arafat is popularly known as Abu Amar. The outcome followed days of speculation over whether Mr. Sharon, who has kept Mr. Arafat confined to the West Bank city of Ramallah for more than three months, would allow him to leave or whether Mr. Arafat would agree to go.

The outcome threw into question the prospects of a Saudi initiative to have Arab leaders offer the Israelis normalization of relations in exchange for a withdrawal by Israel from the West Bank and Gaza Strip, which it occupied in the 1967 war. The prospects became all the more remote after President Hosni Mubarak of Egypt also said he would not attend. But the Saudis and other moderate Arab leaders gathering in Beirut, Lebanon, insisted that they would press ahead with the initiative. Aides to Mr. Arafat said he would address the summit meeting over television from his headquarters in Ramallah.

The developments marked a setback for the Bush administration, which had finally become re-engaged in the search for a Middle East peace and had pressed the Israelis hard to enable Mr. Arafat to attend the meeting, while pressing Mr. Arafat hard to crack down on terror. Another thwarted suicide bombing today indicated that the latter effort was also not succeeding. Another front of the effort by the United States, the attempts by its envoy, Gen. Anthony C. Zinni, to mediate a cease-fire, also seemed stalled. Israeli reports said General Zinni had canceled a meeting of Israeli and Palestinian security officials on Wednesday, thus effectively pushing any chance of a cease-fire off at least past the Jewish holiday of Passover, which begins at sundown Wednesday. The decision was apparently not directly linked to the issue of Mr. Arafat's travel. Officials said General Zinni concluded after floating his own proposed cease-fire arrangements that the two sides were too far apart to bother meeting, and scheduled a separate session with Mr. Sharon instead.

The Arab League summit meeting and General Zinni's mission had generated a gleam of hope for an end to a struggle that had intensified to the brink of open warfare, and the twin blows represented a serious and potentially dangerous setback. If the peacemaking foundered, the widespread expectation on both sides of the conflict was of an increase to levels even higher than before, possibly including an Israeli reoccupation of most lands that had come under Palestinian control.

The cancellation of Mr. Arafat's trip came at the end of a day of furious maneuvering and speculation, overcast by high tensions. A suicide bombing was apparently thwarted when Israeli security forces ordered a suspicious vehicle to stop, and it exploded, killing both men inside. The car was headed in the direction of a large shopping mall in southern Jerusalem crowded with pre-Passover shoppers, and the bomb was evidently strapped to one of the men. In the evening, the Israeli Army announced that two members of an international monitoring force, one Turkish and the other Swiss, were ambushed and shot dead in their car near Hebron, in the West Bank. A third officer, who survived, said a uniformed Palestinian opened fire on them in the dark, despite markings on their car that identified them as officers of the Temporary International Presence in Hebron, an unarmed monitoring force. The group was set up after an Israeli settler killed 29 Muslim worshipers in 1994.

With Israel in preparation for Passover, security was extraordinary. Police officers, soldiers and roadblocks were everywhere in evidence. Israel's private Channel Two news station reported that security forces believed that Palestinians were preparing a major "strategic" terror attack in coming days, but there was no official confirmation. Though Mr. Arafat's chances of traveling to Beirut seemed dim already on Monday, there was continuing speculation that Mr. Sharon would bow to American wishes and let him go at the last minute. But the absence of a cease-fire and continuing terror attacks, as well as severe pressure from hard-liners in the government, had put Mr. Sharon under strong pressure to keep Mr. Arafat grounded.

For both the Israeli and Palestinian leaders, the issue was further mired in their old and bitter rivalry. Mr. Sharon, as defense minister, was the architect of the Israeli invasion that drove Mr. Arafat out of Lebanon in 1982, and there was little doubt that Mr. Arafat intended his return to Beirut — without agreeing to any cease-fire or conditions — as a personal triumph over his nemesis. Israeli radio also reported that Mr. Sharon had rejected an offer from the foreign minister of Qatar to come to Jerusalem to meet him, and then to fly Mr. Arafat to Beirut in his plane. This evening's announcement had the same qualities of improvisation and surprise that so many developments in the constantly changing landscape of the conflict have had. Mr. Sharon had been scheduled to be interviewed on Al Jazeera, the Qatar-based Arabic-language television network. At the last minute, with cameras already set up, the interview was canceled, evidently in a dispute over arrangements. Instead, Mr. Sharon went on Israeli Arabic-language television.

Allowing Mr. Arafat to go would, he said, be possible on two conditions. One would be a public announcement by Mr. Arafat in Arabic of a cease-fire and a call to end violence. The other would be for the United States to give Mr. Sharon leave to bar Mr. Arafat from returning if there was a terror attack in his absence. In fact, Mr. Sharon had not even raised the issue of releasing Mr. Arafat with his security cabinet, and it was on the agenda only for Wednesday. There had also been considerable speculation among Palestinians that even if Mr. Sharon had allowed Mr. Arafat to leave without conditions he might not have, both for fear of not being allowed to return, and to avoid any impression among Arab leaders or his own people that he was bowing to Israeli or American conditions.

The Palestinian minister of information, Yassir Abed Rabbo, said on CNN that Mr. Sharon's comments were "the utmost provocation — this is the ultimate humiliation for the Palestinian people and the whole Arab world. "The fact, however, was that Mr. Arafat stood to gain whether he went or stayed. His treatment at the hands of Mr. Sharon has raised his stature enormously among Palestinians, and the latest episode only added to his standing. Mr. Sharon, by contrast, is now in the position of having defied the Americans. But he, too, is likely to gain short-term support from his government and people, who have continued to suffer punishing terror attacks and who were not in the mood to see Mr. Arafat holding forth in Beirut. Part of the problem, officials said privately, was that the Bush administration had returned to the region in pursuit of its own agenda — to destroy Saddam Hussein of Iraq — and without any long-term plan of action. Thus neither the Palestinians nor the Israelis approached the negotiations with high faith in their success. General Zinni had arrived confidently predicting a cease-fire within days. He has been here almost two weeks.

The fundamental problem, in this as in previous efforts to secure any sort of peace, has been that Israelis and Palestinians are pursuing entirely different goals. Basically, the Israelis want security, and the Palestinians want a state.