Jerusalem (CNSNews.com) - Escalating Israeli-Palestinian violence seemed set to torpedo a 10-day-old declared truce, which never took effect, complicating President Bush's efforts to build an anti-terrorism coalition.

Palestinian sources reported that at least five Palestinians were killed and another 12 wounded when Israeli troops took over Palestinian Authority controlled hill in the divided city of Hebron on Friday morning following two days of repeated shooting attacks on Israelis from those positions.

The Israeli action came just hours after Israeli Prime Minister Ariel Sharon warned in a televised address that Israel would not sacrifice its own security for the sake of building the coalition.

"The fire didn't cease for even one day," Sharon said in reference to the failed ceasefire agreed to last week in a meeting between Israeli Foreign Minister Shimon Peres and PA Chairman Yasser Arafat.

"From this day forward we will rely on ourselves only," he said.

The PA has refused to arrest a number of militants, whom Israel says threaten its security. Neither has the PA acted to prevent numerous shooting and mortar attacks on Israeli targets.

Palestinians have accused Israel of not fulfilling its part of the deal to ease restrictions and allow more freedom of movement. Without such moves, they say, Arafat has little incentive to reign in radical groups.

Washington has been pressing Israel and the PA to halt the violence, which Arab and Muslim states demand as a key prerequisite for joining Bush's fight against terrorism.

Israel has repeatedly offered its assistance, expertise and intelligence services to the U.S. to aid in its fight against terrorism, but Sharon made it clear that Israel would not sacrifice its security just to appease the Arabs.

"Don't repeat the terrible mistake of 1938," Sharon warned.

"Then the enlightened democracies of Europe decided to sacrifice Czechoslovakia for the sake of a convenient temporary solution," he said, in reference to Britain and France's pact with Germany in which they agreed to the partition of Czechoslovakia for a promise of peace, which quickly disintegrated into war.

"Don't try to appease the Arabs at our expense," Sharon warned. "We can't accept this. Israel won't be Czechoslovakia. Israel will fight against the terror."

Czechoslovakia in 1938 had the most powerful army in central Europe but was afraid to fight and instead handed over the Sudetenland to Nazi Germany.

There was no immediate reaction to Sharon's address from Washington. The U.S. Embassy in Tel Aviv refused to comment on it.

Sharon and Peres spoke with Secretary of State Colin Powell overnight about the situation.

Later, it was reported that Powell telephoned Arafat and warned him in the name of Bush that if he did not fulfill his commitments, Washington would not continue its policy toward the Palestinians.

Sharon's speech followed a week of terror attacks, capped off on Thursday by a shooting attack in the northern Israeli city of Afula. A Palestinian gunman disguised as an Israeli paratrooper disembarked from a civilian bus and opened fire on a crowd, killing three Israelis and wounding 16 others. He was killed by police.

In Hebron, Palestinian gunmen fired on Jewish worshippers who came to the Cave of the Patriarchs to celebrate the Succoth holiday on Wednesday, wounding two women, setting off two days of continuous shooting attacks on the tiny Jewish community.

The shootings prompted the Israeli army to take control of "commanding areas," according to an army.

The army regrets that it "was forced to carry out, in practice, the role of the Palestinian Authority of maintaining order and preventing terror attacks toward the Jewish community, as it promised in the ceasefire agreement," the statement added.

During the last ten days since the truce was declared, 26 Palestinians have been killed, many in clashes with Israeli soldiers, and five Israelis have been killed in two attacks by Palestinian terrorists.