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JERUSALEM — Israeli and Palestinian leaders breathed a sigh of relief this week after Iraqi dictator Saddam Hussein caved in on weapons inspections in the face of imminent U.S. attacks.

Israeli officials repeatedly said that Israel was not a party to the conflict and that the chance of a retaliatory attack on Israel was close to zero. But they were relieved nonetheless.

"Obviously, everyone wants a resolution without bloodshed," said David Bar-Illan, Prime Minister Benjamin Netanyahu's communications director.

"What is important now is for the inspection to proceed, so that the region will be safe from non-conventional weapons and the means of their delivery."

Despite the apparent end of the crisis over U.N. arms inspections, Israel's gas mask distribution centers remained open around the clock this week.

Defense Minister Yitzhak Mordechai said Israel is preparing for the remote possibility of an Iraqi attack from a severely limited number of its hidden missiles.

Even before the Iraqi crisis began, Israel's air force had been monitoring the eastern horizon and Israel's Scud-busting Patriot missile batteries had been on a state of alert.

Last Friday when a U.S. attack seemed likely, the security cabinet held a special meeting to discuss the crisis.

At the meeting, Foreign Minister Ariel Sharon said Israel knew how to defend itself. Still, he downplayed the threat to Israel.

"I think we have to continue to lead our normal lives. I would like to encourage tourists to come. As you will see, it is beautiful here, wonderful weather," he said, following the meeting. "Life is normal."

Palestinian officials, who had urged the United States to exhaust diplomatic efforts and avoid military action, were also pleased with the outcome.

"We are very happy that the crisis has ended in a peaceful way," senior Palestinian official Saeb Erekat said this week.

The Palestinian Authority, Erekat said, feared that widespread popular support for Saddam in the event of U.S. military action could put Arafat in a difficult position with the United States.

"We were apprehensive that it may have a negative impact on the peace process and the implementation of the [peace] agreement," Erekat told the Associated Press.

Still, Erekat called on the United Nations to lift the sanctions imposed on Iraq after the 1991 Gulf War.