RAMALLAH, Sept 29: Blowing kisses and making a V-for-Victory sign, Yasser Arafat emerged from his battered compound on Sunday after Israeli forces retreated under US pressure to lift an internationally condemned siege.

The pullback was an embarrassing climbdown by Israel, which had vowed to end the siege only when the Palestinian president surrendered some 50 suspected militants holed up with him.

The about-face followed a message sent by US President George W. Bush to Israeli Prime Minister Ariel Sharon demanding a speedy end to a military clampdown that ratcheted up tensions Washington apparently feared could affect its plans for possible war on Iraq.

Hundreds of elated Palestinians rushed to the presidential complex in the West Bank city of Ramallah after Israeli tanks pulled back from the compound they invaded 10 days ago in response to suicide bombings that killed seven people in Israel.

The Palestinian flag was raised above a partly demolished building in the compound, largely turned into a wasteland of rubble by Israeli armoured bulldozers and explosives in what Israel had hoped would be a blow to Arafat’s prestige.

Instead, Palestinians demonstrated nightly in the West Bank and Gaza in support of a leader who had been under fire from his own people over the slow pace of reforms demanded by the United States as a condition for resuming talks on statehood.

Against the backdrop of sandbags at the entrance to his office block — the only building the Israeli army left standing — a smiling Arafat emerged in his trademark fatigues and headdress to raise his arms in a victory salute.

But in earlier comments to reporters inside his office, he said the Israelis had not complied with a September 24 UN Security Council resolution calling for an immediate end to the siege and “expeditious withdrawal...from Palestinian cities”.

“This is not withdrawal,” Arafat said. “This is only moving a few metres away. They are trying to deceive the world.”

Israel said its troops would stay close enough to the compound to prevent the escape of the 50 wanted militants it said were inside. Israel Radio said the troops would withdraw to lookout points some distance away.

SHARON UNDER FIRE: “The Israeli army will distance its troops from the Muqata (Arafat’s) compound and will be deployed in such a way that the wanted terrorists will not be allowed to leave freely,” said Raanan Gissin, Sharon’s spokesman.