YASSER ARAFAT was said to be in an irreversible coma last night after his condition dramatically worsened.

Rumours of the state of the ailing 75-year-old's health swirled around the world.

Israeli TV reported he was dead. Luxembourg's prime minister also announced the death when he arrived in Brussels for an EU summit.

Even newly re-elected President George Bush said "God bless his soul" when a reporter told him at a White House news conference that Mr Arafat had died.

But then Christian Estripeau, chief doctor at the military hospital outside Paris, where the Palestinian leader is being treated, said: "Mr Arafat is not dead."

Last night, Mr Arafat's chief of staff, Rams Cheery, said: "I am standing next to the president's bed. He is in grave condition."

The Israeli military was placed on high alert when news broke that Mr Arafat had lapsed into a coma.

The Israeli army has a contingency plan, called New Leaf, to deal with any fallout from Mr Arafat's death, including possible Palestinian riots.

The military has not yet moved forces to anticipated problem areas, but commanders were told to be on standby.

Foreign Minister Silvan Shalom said Mr Arafat's health was being tracked very carefully.

"Our goal is to prepare for the day after, if and when he dies," he said.

In the West Bank and Gaza, Palestinian officials were holding urgent meetings, and Prime Minister Ahmed Qurie took over some of Mr Arafat's powers over security and financing.

Earlier in the afternoon, French President Jacques Chirac went to the hospital and saw Yasser Arafat and his wife, to whom he expressed his best wishes, the President's office said.

Mr Chirac also met members of the Palestinian Authority and doctors.

Mr Arafat's true condition has remained a mystery, with Palestinians issuing conflicting reports about his health and medical officials mostly keeping silent.

The senior Palestinian official with close access to the French medical team said Mr Arafat was comatose, but would not say when he lost consciousness.

French TV quoted an anonymous French medical source saying Mr Arafat was in an "irreversible coma" and "intubated" - a process involving threading a tube down the windpipe to the lungs, often to connect a respirator.

Dr Estripeau said: "The clinical situation of the first days following admission has become more complex.

"The state of health of the patient requires appropriate treatment that required his transfer on Wednesday afternoon to a unit adapted to his pathology."

The mood among Palestinians was gloomy.

In the West Bank city of Ramallah, senior Palestinian officials convened an emergency meeting after learning of the deterioration in Mr Arafat's condition.

A prolonged Arafat incapacitation, or death, could have profound impact on the Middle East.