Officials suggested that Mr. Arafat's Palestinian Authority headquarters could be among the first targets of an Israeli escalation.
Fierce fighting was reported in several parts of Gaza on Sunday night after an earlier, tentative cease-fire, and Israeli troops fired on rioters in the Palestinian towns of Hebron and Ramallah in the West Bank. More than 80 people have been killed in 11 days of violence.
The Israeli national security adviser, Maj. Gen. Uzi Dayan, said Sunday that if the government's ultimatum is not honored, the headquarters of "those responsible" for the violence might be attacked, suggesting the army could destroy the infrastructure of Mr. Arafat's Palestinian Authority.
Also Sunday, the Israeli newspaper Ha'aretz reported that the Israeli command had prepared a "sanctions package" against the Palestinians, including a sealing off of the West Bank and Gaza, a freeze on all monetary transfers and more aggressive use of armor and helicopters against armed Palestinian groups.
The latest developments came on Yom Kippur, the Day of Atonement, considered the holiest day on the Jewish calendar. On what was supposed to be a quiet day of reflection and introspection, Israelis were once again on a war footing.
Radio stations that would normally be silent from sundown for the Yom Kippur observance announced that they would keep open a special "emergency channel" that would come on in the event of urgent developments.
For many Israelis, the mood Sunday evoked the trauma of 1973, when the country was attacked on Yom Kippur by Egypt and Syria. Anxiety among ordinary Israelis was heightened by the death of a 55-year-old Jewish man killed while driving along the Tel Aviv-Haifa road, after a stone hit him in the chest.
The mood of war was reinforced as Mr. Barak spoke at a news conference from Israel's northern border with Lebanon, where the country faces a conflict on a second front, after three Israeli soldiers were seized Saturday by Hezbollah guerrillas. Military preparations were under way at the border for a possible retaliation by Israel, which Mr. Barak hinted might not be confined to southern Lebanon and could include Syria, which backs Hezbollah.
In Washington, a senior administration official, speaking on condition of anonymity, said that President Clinton had spoken with Mr. Barak and Mr. Arafat on Saturday about having a three-way summit in the coming days, possibly at the resort of Sharm al Sheikh on Egypt's Sinai peninsula. There was no indication, however, that either the Israeli or the Palestinian leader had accepted the proposal.
Mr. Clinton spoke Sunday afternoon to Syrian President Bashar Assad and Egyptian President Hosni Mubarak, a White House official said.
Appearing on the CBS News program Face the Nation, National Security Adviser Sandy Berger said the administration has begun to see some results from discussions Secretary of State Madeleine Albright had last week with Mr. Barak and Mr. Arafat, in which each leader pledged to promote cooperation between their respective security organizations. Mr. Berger said U.S. mediators were trying "to facilitate [contacts] ... so that location by location, hot spot by hot spot, we can try to help them gain some control over the situation."
There were some signs of progress earlier Sunday, at least in Gaza. Israeli and Palestinian military commanders announced a U.S.-brokered truce in the fighting around the Netzarim Junction, the scene of fierce clashes over the last week. For the first time in more than a week, there was no firing at Israeli positions at the junction, and some of the more incendiary anti-Israeli rhetoric disappeared from Palestinian radio and television broadcasts.
Overnight, Israeli troops blew up two high-rise apartment buildings in Gaza that had been used as barracks for the Palestinian police, and which lately were believed to have become the principal sniper positions for gunmen firing on Israeli positions.
Fighting also flared at Raffah, near the Egyptian border. Israel closed down the Palestinian international airport in Gaza after reports that shots were being fired from within the airport property.
On the West Bank, the Israelis used helicopter gunships to strafe Palestinian gunmen's positions around Hebron. Clashes continued around the town of Ramallah, where Palestinians reportedly fired on a nearby Jewish settlement. Gunfire also was heard Sunday night in the area around Jerusalem's Old City, and near the American Colony Hotel where many foreign reporters are housed.
Earlier, there were reports of Jewish settlers throwing rocks and firing shots at Palestinians in the West Bank.
Mr. Barak, speaking to reporters at the border and appearing on U.S. television, held Mr. Arafat personally responsible for the latest violence and made clear that if it isn't ended by sundown Monday, the peace process begun seven years ago in Oslo, Norway, would be formally pronounced dead.
Nabil Sha'ath, a senior Palestinian official, said it was Israel that could end the violence by removing its troops from Palestinian-controlled areas.
"He should pull out of our cities and our heavily populated areas," he said, referring to Mr. Barak. "Pull out like he did in Lebanon."
While the Palestinian and Israeli leadership may have been looking for ways to avoid an all-out cancellation of the faltering peace process, among many people on both sides, that process was already long dead.
"The Palestinian leadership has tried the peace process to solve the issue, but they have failed," said 46-year-old Faraj Mousa, a father of five in the West Bank. "The situation now is an outcome of desperation, the frustration of the Palestinian people."
"The peace process was a sham â€“ an absolute sham â€“ right from the start," said Yehuda Borer, a Jewish settler in the West Bank settlement of Bet El. "It was the wishful thinkers, the egghead professors, who thought this scheme up. ... There was a process, but there was no peace."