The U.S. and Israel may be playing a good cop/bad cop routine. Israel goes in with force, and we've made them promise not to harm Arafat. But we're actually in it together, having agreed on the course of action.
There was talk a week or two ago that the U.S. was looking to solve the Israeli-Palestinian conflict to simplify things before going to war with Iraq. This was generally interpreted as more useless peace process talk. Maybe this sort of Israeli military action is what was really meant.