JERUSALEM, July 6 (JTA) — A recent standoff between Israeli and Palestinian armed forces in the Gaza Strip has highlighted the dangers resulting from the prolonged impasse in the peace process. The incident also provoked a new round of infighting between Prime Minister Benjamin Netanyahu and some of his key ministers, whose inability to agree on policy issues has contributed to the impasse. The standoff began July 2, when Israeli troops prevented a convoy of Palestinian vehicles from traveling along a main road in Gaza. Palestinian authorities responded by closing access roads throughout the area, a move that left Jewish settlements there under a virtual blockade. A compromise was reached in the pre-dawn hours of July 3 under which Israel permitted the convoy to proceed on what was said to be a one-time basis and the Palestinians lifted their blockade of the access roads leading to the settlements. Discussions continued this week between high-level Israeli and Palestinian security officials with the goal of defining a long-term solution to the dispute and preventing such confrontations in the future. But tensions in recent days were not confined to Gaza. On Sunday, suspected Jewish militants torched four Palestinian produce stalls in the West Bank town of Hebron. Israeli police were investigating whether there was any connection between the incident and an attack last Friday, when Jewish men on horseback allegedly damaged Palestinian cars in Hebron by whipping them with chains as they rode past. Two Jewish teen-agers have been arrested in connection with that incident. While the attacks in Hebron were the latest to erupt in the often volatile West Bank town, the Gaza incident was potentially far more dangerous. At the height of that standoff, Palestinian police took up positions behind hastily assembled barricades while Israeli forces moved armored personnel carriers to the area. The two sides, separated only by a matter of yards, trained their rifles on each other. Officials on both sides later said the incident could quickly have deteriorated into a shootout that could have provoked widespread violence. They said the fragile state of the peace process provided the immediate backdrop for the tense situation on the ground. Observers in Israel added that the rupture in relations between Netanyahu and Palestinian Authority Chairman Yasser Arafat, caused by the 16-month deadlock in negotiations, had apparently made it impossible for the two to get on the phone and defuse the situation. Beyond this, the observers added, Netanyahu was apparently unable or reluctant to call upon the U.S. Middle East peacemaking team to intervene diplomatically and help ease the situation. In the past, this would have been the natural, almost instinctive reaction by Israel in a crisis of this kind. But Netanyahu’s continued rejection of an American proposal that calls on Israel to turn over an additional 13 percent of the West Bank as part of a plan to breathe life back into the peace process has severely strained U.S.-Israel relations. The ailing peace process prompted three Arab leaders — Egyptian President Hosni Mubarak, Jordanian King Hussein and Arafat — to convene in Cairo on Sunday. While the three demanded that Israel immediately cancel its recently announced plans to extend the Jerusalem municipality’s jurisdiction, Mubarak and Hussein rejected Arafat’s call for an Arab summit. Mubarak said a summit should be convened only if the U.S. initiative fails. If Israel’s difficulties with the Arabs and the Americans were not enough, Netanyahu faced yet more attacks from within his own Cabinet — and from the opposition, which forced the Knesset back from recess to discuss the stalemated peace process. The premier’s approach to crisis management triggered another round of internal feuding regarding the issue of the his own credibility. Infrastructure Minister Ariel Sharon angered and embarrassed Netanyahu during Sunday’s weekly Cabinet meeting by directly questioning the premier’s veracity. During the meeting, Netanyahu told his ministers that the deal eventually worked out to end the Gaza standoff had received his approval. He went on to praise the army for ending the incident without violence. “That’s not what you told me on the phone,” Sharon interrupted. “You said you did not approve of it and nor did the defense minister.” The prime minister said something about that having been a private conversation, but the damage was already done: His verbal clash with Sharon quickly became headline news. Sources in the Prime Minister’s Office said Netanyahu resented the way Sharon had deliberately betrayed a confidence and made the prime minister look duplicitous during the Cabinet session. Nor did the infighting end there. Defense Minister Yitzhak Mordechai, who was at the premier’s residence in Jerusalem late into the night of July 2 as attempts were made to defuse the Gaza standoff, weighed in this week through sources close to him with some anger of his own. He and the prime minister had indeed approved the deal that ended the standoff, Mordechai insisted. What, then, was this attempt by Netanyahu to backtrack in the face of criticism from hard-liners on the far right? He was referring specifically to Sharon and ministers representing the National Religious Party, who had expressed reservations about the decision to allow the Palestinian convoy to use the disputed road. The sparring match involving top government officials rekindled comment and speculation about the rocky Netanyahu-Mordechai relationship and about the prime minister’s ability to make decisions under pressure — and stick to them.