In a message to the Israeli people that coincided with the Jewish New Year, he stated: "I have given strict orders for a total ceasefire and I hope the Israeli Government will respond to this call for peace and will decide to cease firing."
The open letter was released by his office less than 24 hours after Israeli Prime Minister Ariel Sharon had called on Mr Arafat to announce a truce.
Mr Sharon said he would not allow ceasefire talks between his Foreign
Minister, Shimon Peres, and Mr Arafat until the latter ordered his men to hold
their fire and there was calm for at least 48 hours.
A would-be ceasefire was announced on 13 June following mediation by American Central Intelligence Agency Director George Tenet, but has failed to take hold on the ground.
Despite talk of a ceasefire, Monday saw the continuation of recent violence in the Palestinian territories.
A Palestinian was reportedly killed by Israeli military fire in Rafah in the southern Gaza Strip, while an Israeli soldier was hit and seriously injured by sniper fire near the West Bank town of Ramallah following a riot by Palestinian students in the area.
Bombing arrest
Israeli tanks and helicopters opened fire on Palestinian positions close to Ramallah following the shooting of the soldier. At least four Palestinian security officers were injured in the bombardment.
Palestinian gunmen returned fire with automatic weapons.
The violence in Ramallah flared amid Palestinian anger that Israeli forces had sealed off the town for the Jewish New Year holiday. It was the scene at the weekend of frequent Israeli military incursions and heavy clashes.
In a separate development, Israeli authorities announced the arrest of a 21-year-old Jordanian woman in connection with last month's bombing of a pizza restaurant in Jerusalem in which 16 people - including a suicide bomber - died.
More than 800 people - most of them Palestinians - are believed to have died since the beginning of the Palestinian intifada, or uprising, almost a year ago.