JERUSALEM (CNN) -- Palestinian leader Yasser Arafat hinted darkly at armed conflict Sunday, drawing sharp protest from Israel as U.S. envoy Dennis Ross sought to jump-start the latest land-for-security deal between the warring neighbors.

Ross met Sunday with negotiators from both sides as part of his mission to oversee implementation of the Wye River deal.

Israel's parliament, the Knesset, is set to begin debate on the agreement Monday. And opponents may use Arafat's words to argue against the accord.

Arafat, the president of the Palestinian Authority, on Sunday hinted at armed conflict over Jerusalem.

"Those who are far and near must understand that our guns are ready. We will take them up if they (Israelis) try to stop us from praying in Jerusalem," announced Arafat during a broadcast on the official Voice of Palestine Radio.

Palestinian Authority officials say Arafat's statements were misinterpreted. But the Palestinians do want the eastern sector of Jerusalem to be the capital of a Palestinian state. The eastern part of the city was annexed by Israel after its capture from Jordan in the 1967 Middle East war.

Arafat also reaffirmed his pledge to declare an independent Palestinian state on May, 4, the date set in interim peace deals for the conclusion of "final status" talks on the future of the West Bank and Gaza.

The Palestinian leader spoke in the West Bank town of Ramallah to a crowd of supporters marking the 10th anniversary of the PLO's declaration of independence. He warned that the Palestinian uprising could be restarted.

"If they (the Israelis) don't want to continue on the path of peace, we will start it (the intifada) all over again," said Arafat. "But I tell them we have made the peace of the brave out of conviction."

Arafat's statement drew an angry reaction from a spokesman for Israeli Prime Minister Benjamin Netanyahu.

"By stating he would use rifles against Israel, Yasser Arafat is declaring war on the peace process," Netanyahu spokesman David Bar-Illan said in a statement.

Bar-Illan also said Netanyahu would raise the matter Thursday in a special Cabinet meeting convened to vote on the first phase of the Israeli troop pullout.

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An Israeli official said the United States was asked to condemn Arafat's statements.

Ross also met Sunday with Israeli Foreign Minister Ariel Sharon, whose comments aren't likely to please Washington either.

In comments broadcast on Israeli radio, Sharon urged Jewish settlers to grab West Bank hilltops before a permanent agreement is reached on the area where Palestinians hope to build an independent homeland.

"Everyone there should move, should run, should grab more hills, expand the territory," exhorted Sharon. "Everything that's grabbed, will be in our hands. Everything we don't grab will be in their hands."

The United States has asked Israel to refrain from any new construction in the West Bank. The Wye River accord says both Israel and the Palestinians will not carry out any unilateral actions.

Netanyahu adviser Bar-Illan said Sharon's comments did not conflict with that pact because Sharon referred only to hilltops next to Jewish settlements that Israel already claims

Meanwhile, at the Wad Rahal village, Israeli troops clashed with stone-throwing Palestinian demonstrators protesting the Israeli confiscation of West Bank lands to build roads for Jewish settlements, witnesses said.

The violence erupted when Israeli troops moved in to disperse 300 Palestinians trying to block Israeli bulldozers from tearing down a vineyard in the path of the planned roads.

In another incident, an Israeli civilian was shot and wounded in a drive-by shooting near the Jewish settlement of Hermesh, according to the Israeli army.

The Associated Press and Reuters contributed to this report.