KUWAIT - Egyptian President Hosni Mubarak warned in remarks published Tuesday that "violence and terrorism" between Arabs and Israelis was in danger of escalating, but ruled out war.

In an interview with Kuwait's al-Seyassah daily, Mubarak ruled out positive peace developments under Prime Minister Ariel Sharon who he said would lead the region to a "catastrophe".

"The situation is dangerous and the region can explode, but not with war....There is a (1979) peace treaty between us and them," Mubarak said.

"What now exists is violence and terrorism. Violence is the only language (Sharon) understands. He lacks the vision needed to negotiate.

"The first to face the catastrophe will be the Israeli people if he continues along the same policy. "Terrorism will turn everything upside down. Nobody escapes from it. Anything Israeli or related to Israel will be targeted," he said.

Mubarak, who has played a major role in trying to bring Israel and the Palestinians closer, insisted that peace was the only option for the region.

The Egyptian president warned of more bloodshed, the spread of terrorism and a vicious power struggle among Palestinians if Israel attempted to re-occupy areas under Palestinian control.

"There will be a struggle among those after Arafat's authority...chaos will prevail, terrorism and violence will spread," he said. "We have to think about who will come after Arafat and enjoy the backing of the Palestinian people?"

(c) 2001 Reuters