JERUSALEM (AP) _ In a massive display of anger, Palestinians slammed shut shops and businesses across the West Bank, Gaza Strip and east Jerusalem on Thursday to protest Israel's expansion of Jewish settlements and slowness in resuming peace talks.

The prospect of a direct confrontation between Palestinian protesters and the Israeli army loomed for Friday. Yasser Arafat called for mass prayers at Jerusalem's Al-Aqsa Mosque, even though most Palestinians are barred from entering the city. Israeli troops were ordered to reinforce checkpoints at the entrance to the city.

The four-hour general strike was a clear show of Palestinian support for Arafat in his struggle with Israel's new hard-line government.

And in what appeared to be a small victory for the Palestinians, the two sides' top negotiators _ Dan Shomron and Saeb Erakat _ held an unscheduled meeting Thursday. It was their first meeting since Netanyahu took office in June.

``We support President Arafat because the new Israeli government is not looking for peace,'' said Akram Moussa, who closed his Gaza City supermarket.

So far, Netanyahu has refused to meet with Arafat or to commit himself to completing Israel's overdue troop pullout from Hebron, the last West Bank city under Israeli control. He has also ruled out negotiations over Palestinian demands for an independent state with east Jerusalem as a capital.

Palestinians fear building more and larger Jewish settlements in the West Bank and Gaza will destroy their last hopes of someday establishing a state there.

Faisal Husseini, the top Palestinian official in Jerusalem, said the call to Friday prayers was meant to test Israel's claim that it ensures freedom of worship in Jerusalem. Under Israel's six-month closure of the West Bank and Gaza, most Palestinians have been barred from entering the disputed city.

Danny Naveh, secretary of Prime Minister Benjamin Netanyahu's Cabinet, warned that ``any deterioration to violence _ any escalation _ is likely to reduce our will to move the peace process forward.''

The deterioration of the peace process since Netanyahu took office, as well as internal problems of corruption and human rights abuses, has eroded Arafat's support among Palestinians.

But Thursday morning's strike _ the first open confrontation with the new government _ showed a people united in anger.

Life in Palestinian towns and villages came to a halt as merchants shut shops and banks and government offices closed. Shopkeepers sat in front of their shuttered stores, listening to radios and reading newspapers. In some places, Palestinian police enforced compliance.

``It's our battle for Jerusalem and I think it is now or never,'' said Abed Nasser Adin, a 45-year-old shopkeeper in Hebron, where more than 90 percent of the shopkeepers observed the strike.

Palestinian legislator Hanan Ashrawi said the strike was intended to show the world that Netanyahu was sabotaging chances for reconciliation while claiming he was committed to peace.

``We are not going to put up with Israeli smokescreens,'' she said.

Strikes were a common protest tool during the 1987-1993 uprising against Israeli occupation. Mainly designed to demonstrate unity, the strikes have had little effect on Israel's economy.

Jordanian Prime Minister Abdul-Karim Kabariti met with Arafat on Thursday and promised his country would intercede with Israel on behalf of the Palestinians.

In unusually tough language for Jordan, which has had warm ties with Israel since the two countries signed a peace agreement in October 1994, Kabariti said Jordan rejected Israel's policy of ``talking peace and at the same time expanding settlements.''

Kabariti also called on Israel to lift its six-month closure of the West Bank and Gaza Strip.

The protests were prompted by reports earlier this week that Israeli Defense Minister Yitzhak Mordechai had approved 900 new homes in the West Bank town of Kiryat Sefer.

Israel radio and settler groups said Thursday that Mordechai actually had approved a total of about 2,000 new homes in the West Bank.

The approvals reversed the policy of the Labor governments of Yitzhak Rabin and Shimon Peres, who had curbed building in settlements other than those just outside Jerusalem.

The Arab League issued a statement Thursday saying Israel's expansion of settlements and demolition this week of a Palestinian youth center were acts of ``flagrant aggression against the Palestinian people'' that threatened to ``bring back tension and violence to the region, with all of its dangers and risks.''