RAMALLAH, West Bank – Prime Minister Blair offered yesterday to host a one-day Middle East conference in the new year to help rehabilitate the battered Palestinian Authority, encourage reform, and serve as a bridge to renewed peace talks, stalled by four years of violence.

Mr. Blair, the highest-ranking visitor to the West Bank since Yasser Arafat’s death on November 11, said a growing sense of hope must now be translated into action, while endorsing Israel’s precondition for peace talks – an end to Palestinian attacks – and the Palestinian goal of an independent state.

Yesterday was the first time Mr. Blair talked in public about his proposed London conference, considerably scaling down the expectations of many who expected a full-blown British Middle East peace push.

Instead, Mr. Blair said, the conference would be a one-day affair in March, dealing only with reforms in the Palestinian Arab administration and additional aid. He said it would serve as a “bridge to the road map,” the stalled international peace plan leading to a Palestinian Arab state, but calling a conference to discuss substantive issues “is not for me to undertake.”

Interim Palestinian Arab leader, Mahmoud Abbas, said he welcomed the idea of the conference, although the Palestinian Arabs initially hoped for a broader agenda, including key disputes with Israel over Jerusalem, the fate of Palestinian Arab refugees, and the borders of a Palestinian Arab state.

Despite Mr. Blair’s peace push, violence persisted yesterday.

Israeli troops entered the Khan Younis refugee camp in southern Gaza after midnight for the second time in a week, trying to stop terrorists from firing rockets and mortars at nearby Israeli settlements and army bases.

As Israeli bulldozers flattened damaged structures, soldiers exchanged fire with Palestinian Arabs, killing three, including two gunmen, Palestinian Arab security officials said.

After nightfall, Palestinian Arabs said the Israelis were pulling out of the camp. The military said a redeployment was in progress.

Near the West Bank city of Hebron, an Israeli civilian working on the West Bank separation barrier was shot and killed by Palestinian Arabs. The Al Aqsa Martyrs Brigade, a terrorist group affiliated with the mainstream Fatah movement, claimed responsibility.

At a joint news conference in Ramallah with Mr. Abbas, Mr. Blair said both Israelis and Palestinian Arabs understand the need for security.

“We have to have a situation where everything that can be done is being done to stop terrorism and violence,” he said, offering British help. Mr.Abbas replied that security was essential for both sides.

In a BBC interview, Mr. Blair amplified that point. “There is absolutely no sympathy left in the international community for people who are ambivalent about terrorism,” he said. “On the other hand, there is complete sympathy for the desire of the Palestinians for their own state.”

Although the scaled-down conference fits Israel’s wishes, Prime Minister Sharon said his country would not attend. “Since the subject deals only with Palestinian issues,” Mr. Sharon said after meeting Mr. Blair, “together we reached the conclusion that there is no need for Israeli participation.”

Mr. Abbas, who is running to replace Arafat in January 9 elections, said the Palestinian Arabs are eager to resume talks with Israel. “We are very keen and very concerned about catching up on the lost time,” he said, referring to the deadlock during more than four years of fighting. The international community has long pushed for Palestinian Arab reform, but made no inroads while Arafat was alive. Mr. Abbas has promised to make changes, including streamlining the unwieldy security services.

Before meeting Mr. Abbas, Mr. Blair briefly paid his respects at Arafat’s tomb in the courtyard of the late Palestinian Arab leader’s headquarters in Ramallah. Mr. Blair walked toward the grave, nodded slightly, and then walked on. The Palestinian Arabs had hoped Mr. Blair would lay a wreath.

After seeing Mr. Sharon, Mr. Blair said, “There is not going to be any successful negotiation or peace without an end to terrorism,” echoing the Israeli position.

Mr. Sharon said if there is a “full cessation of terror, hostilities, and incitement, the door will be open for the ‘road map.'”

But so far the Palestinian Arabs have made no moves to stop the attacks, he said. “I understand there are elections now…but they are not doing even the slightest effort,” he said in English in his first openly critical remarks about Mr. Abbas since Arafat’s death.