Israel's Cabinet has decided not to allow a UN fact-finding team to come to the region to look into the battle in the Jenin refugee camp.
Communications Minister Reuven Rivlin says the United Nations had gone back on its agreements with Israel over the team.
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The Israelis insisted the team be made up of military and terrorism experts, not political figures and experts on refugees.
Mr Rivlin said the composition of the team and its terms of reference made it inevitable that its report would blame Israel.
He said: "This awful United Nations committee is out to get us and is likely to smear Israel and to force us to do things which Israel is not prepared even to hear about, such as interrogating soldiers and officers who took part in the fighting.
"No country in the world would agree to such a thing."
Israel's Cabinet has approved a US proposal aimed at ending the month-old siege outside Mr Yasser Arafat's compound in Ramallah.
The US plan calls for US and British personnel to guard six Palestinians wanted by Israel.
In turn, Mr Arafat would be allowed to leave his compound and move freely in the West Bank and the Gaza Strip, Israeli government sources say.
US President George W. Bush raised the proposal yesterday in a telephone conversation with President Ariel Sharon.
An official letter outlining it was sent by US Secretary of State Colin Powell, according to Israel.
The United States Embassy has declined to comment on the issue.
The Israeli Cabinet approved the proposal by a vote of 17-8, Israel Radio reports.