Standoff continues at Bethlehem Nativity shrine, after gunmen flee Santa Maria Church

About 200 people, many armed, remain barricaded in the Church of the Nativity, which gunmen entered Tuesday to escape firefights with Israeli soldiers. Mediation efforts are underway. 12 Palestinians are reported killed in Bethlehem. American and British officials have been allowed into the city to evacuate foreign nationals. Earlier, 10 Tanzim fighters slipped out of the Church of Santa Maria, releasing the nuns and monks held hostages but eluding IDF forces outside.

The Palestinian gunmen entered the large stone structure in the town center. "They have decided to take this church as a safe harbour," Marc Innaro, a journalist with Italian state broadcaster RAI, reported from inside the church. Several journalists are believed to be confined there.

The militants shot at IDF troops from within the church. Israeli forces were ordered not to return fire, although several armed Palestinians were killed in clashes in adjacent Manger Square. Fighting subsided Wednesday. An army spokeswoman said the army had brought in a representative to mediate.

Israel also initiated intensive talks with the Vatican representatives Wednesday. Foreign Ministry officials accused the Palestinians of cynically exploiting holy Christian sites and insisted that Israel would resist provocations. Pope John Paul II issued a statement expressing concern about violence in holy places.

The Palestinian Patriarch in Bethlehem, Michel Sabah, said that the armed men inside the church had agreed to put down their weapons, so he had decided to offer them sanctuary inside. Food and water supplies are reportedly running low. Palestinians within the Church said that the gunmen were also running out of bullets.

Israeli security officials believe that at least fifty Palestinian fighters remain in the Church of Nativity, some of them high on the Israeli list of wanted terrorists.

On Wednesday afternoon, 10 Palestinian gunmen, reportedly of the Fatah Tanzim militant group, escaped out the back door of Bethlehem's Santa Maria Church, leaving behind the nuns and monks they had held as hostages. The Israelis reported finding inside a dead body, bound and murdered.

Israelinsider