Israel early today lifted its 34-day siege of the headquarters of the Palestinian leader, Yasser Arafat, after the Palestinians transferred six men wanted by Israel to a jail in the West Bank city of Jericho under terms of a deal brokered by the United States.

The last Israeli tanks departed Ramallah shortly after 1 a.m. A crowd of several hundred Palestinians immediately rushed into Arafat's compound, waving flags, embracing one another and hoisting assault rifles in the air. Though he didn't leave the building, Arafat appeared briefly before reporters to angrily denounce the Israelis for surrounding the Church of the Nativity in Bethlehem, where a fire broke out after Israeli forces and Palestinians traded gunfire.

"It's an ugly crime," Arafat said of the fire. "I call on the international community to take immediate measures in the face of this horrendous crime. Those terrorists, Nazis and racists, how can we tolerate them after committing this crime?"

The plaza outside Arafat's headquarters filled with shouts of jubilation as Palestinians who had been confined with Arafat were reunited with friends and family. A member of Arafat's special guard, Force 17, who was partially paralyzed when he was shot on the first day of Israeli assault, was borne aloft on a stretcher above the crowd and carried from the compound to a waiting ambulance as he waved and flashed victory signs.

Several hours earlier, the six wanted men left Arafat's compound in a convoy of British and U.S. diplomatic vehicles and were driven to Jericho, where they will be held under the supervision of U.S. and British guards.

Also Wednesday, U.N. Secretary General Kofi Annan abandoned efforts to send a fact-finding mission to investigate Israel's assault on the Jenin refugee camp. Israel at first welcomed the probe, but later charged bias on the part of the appointed members of the mission. The refugee camp was the scene of the fiercest combat during the Israeli invasion of West Bank cities and towns. "Personally, I don't think Israel should be tried by the world," Prime Minister Ariel Sharon said in an interview broadcast Wednesday on ABC-TV's "Nightline."

The fire in the Church of the Nativity broke out around midnight Wednesday, but was extinguished by those inside; Palestinians and Israelis accused each other of starting it. Israeli troops have besieged the church, revered by Christians as the birthplace of Jesus, saying there are armed Palestinians inside who are wanted by Israel. About 200 people, including 25 to 30 Palestinian fighters, have been holed up in the church complex for nearly a month.

In Ramallah, the prisoner transfer opened the door for Arafat, along with aides, security officers and at least 25 peace activists from abroad, to walk free after weeks of confinement. The siege began when Israeli tanks smashed down the walls of his compound at the start of Israel's military offensive in the West Bank on March 29. Arafat's aides said he would not leave his offices until Palestinian security forces had swept the area to ensure his safety, possibly by later today.

The lifting of the siege fulfilled a demand of the Bush administration, as well as European governments.

The withdrawal was a difficult step for Sharon and his government, which have held Arafat directly responsible for a wave of suicide bombings against Israelis, and only a month ago announced a policy of "isolating" the Palestinian leader. Far from rendering Arafat irrelevant, Israel's offensive has elevated his standing among Palestinians to its highest level since the establishment of the Palestinian Authority in 1994, according to Palestinian analysts and public opinion polls.

"Sharon's objective backfired," said Ghassan Khatib, director of the Jerusalem Media and Communications Center, a Palestinian research organization. "It's not only that he failed to make Arafat irrelevant or to get rid of him, he even made him more popular."

But Arafat has suffered setbacks as well. The Israeli incursion caused widespread physical damage to Palestinian cities and towns and left Arafat's security services a shambles. Also, the deal lifting the siege required him to acquiesce in the jailing of one of his closest aides, Fuad Shubaki, Arafat's chief accountant, as well as Ahmed Saadat, the general secretary of the Popular Front for the Liberation of Palestine (PFLP), the second-largest faction in Arafat's Palestine Liberation Organization.

Israel has accused Shubaki of arranging a 50-ton shipment of Iranian arms to the Palestinian Authority, which Israeli commandos intercepted in January, and accused Saadat of ordering the assassination last October of a right-wing Israeli cabinet member, Rehavam Zeevi. That killing followed the assassination of Saadat's predecessor as head of the PFLP, Abu Ali Mustafa, in a missile attack. The four other men involved in the prisoner transfer were convicted last week in a makeshift Palestinian court of involvement in Zeevi's assassination.

The proceedings have drawn further criticism of Arafat. "Arresting those people was a sin on Arafat's part," Mahir Tahir, a member of the executive committee of the PFLP in Damascus, said tonight on al-Jazeera satellite television. "And now that sin has turned into a crime, by turning those people over to American and British hands."

Arafat arrested the four men in mid-March under intense U.S. and Israeli pressure, with the understanding that Sharon would then permit him to travel outside Ramallah, where he had been confined since December. But the understanding collapsed following a surge in suicide bombings and Israel's subsequent invasion of six Palestinian-controlled cities in the West Bank, including Ramallah.

Israeli forces have since withdrawn from the center of most of those cities, but they remain poised on their outskirts and continue to enter Palestinian-controlled areas in pursuit of those they describe as terrorists planning imminent strikes.

In Bethlehem, at the Church of the Nativity, flames shot high for about 20 minutes from the second floor of the Franciscan Monastery in the Latin section of the compound. The fire appeared to be in a former cafeteria, the site of an earlier blaze, according to a member of the Bethlehem Fire Department. The church itself apparently was not damaged. Municipal fire crews could see the flames but could not go to the scene because of the curfew imposed by the Israeli army.

This was the third fire in the church compound since Israeli troops surrounded it after about 200 Palestinians retreated into the holy site during the army's incursion into Bethlehem on April 2. Al-Jazeera contacted a Palestinian official inside, Bethlehem district governor Mohammed Madani, who said one person suffered minor burns while extinguishing the flames.

Palestinians said the fire was started by intense Israeli gunfire. Arafat, after receiving word of the blaze, told reporters in Ramallah: "How could the world possibly be silent about this atrocious crime? . . . This is a crime that cannot be forgiven."

An Israeli army spokeswoman asserted that Israeli forces "returned fire in the air, not in the church." Also on Wednesday, an Israeli soldier shot and wounded a gunman in the church courtyard, the army said.

There was also more violence in the Gaza Strip, where four Palestinians, including an 11-month-old girl, were killed during violent clashes with Israeli troops.

Early today, Israeli tanks and armored vehicles moved into the West Bank town of Tulkarm, witnesses said. Soldiers declared a curfew, but no clashes were reported.

The compromise on lifting the siege of Arafat's headquarters was reached last weekend after pressure from the Bush administration. But working out the details of the transfer to Jericho of the six wanted men proved difficult. The outcome of talks among Arafat, four top aides and British and U.S. diplomats who visited his compound remained uncertain as late as Wednesday evening.

One big hang-up, according to a senior Palestinian official close to the talks, was Arafat's reluctance to jail Saadat, the PFLP official.

The official said the Palestinians sought to finesse the issue by agreeing to hold Saadat in Jericho for "questioning" and treating the Britons and Americans assigned to the jail as "observers" rather than wardens. By late Wednesday, Palestinian and Israeli officials disclosed that they had reached a tentative agreement, but did not give details. Saadat was taken to Jericho with the others.

Hockstader reported from Jerusalem; correspondent Doug Struck in Jerusalem contributed to this report.

Yasser Arafat, who had been confined to his headquarters since March 29, expresses anger over the fire at the Church of the Nativity.Palestinians celebrate the withdrawal of Israeli forces from Yasser Arafat's compound in West Bank city of Ramallah.