Israeli troops pulled out of the Bethlehem area early today, Palestinians said, boosting chances for a truce to end nearly 18 months of violence.

Israeli troops are set to withdraw from areas around the West Bank city of Qalqilya today, a spokesman for Prime Minister Ariel Sharon said Sunday.

Israel has pulled its soldiers and tanks from two of the six Palestinian-controlled towns it invaded in retaliation for the assassination of Tourism Minister Rahavam Zeevi earlier this month.

Israeli forces began redeploying from two West Bank towns tonight, hours after Palestinian gunmen raked a bus stop in northern Israel with automatic gunfire, killing four people, a Government official said.

Palestinian gunmen killed five Israelis in two shooting attacks in the north today, throwing into question Israel’s planned withdrawal from areas in two West Bank towns it occupied to prevent attacks.

Palestinian militants driving through a northern Israeli town opened fire on people waiting at a bus stop today, killing three people.

Israel was ready to pull its troops out of Bethlehem today if Palestinian gunfire stops, a senior official said.

Israel said tonight it had suspended a planned withdrawal from two West Bank towns after Palestinian gunmen fired on its soldiers.

Three Palestinians were killed today as Israeli tanks moved deeper into West Bank towns, tightening their grip on biblical Bethlehem and five other towns in the widest operation against the Palestinians in years.

Six more Palestinians were killed today after tanks moved into the biblical town of Bethlehem and commandeered two hotels.

Israeli tanks and troops have moved into Bethlehem in the West Bank.

Israeli-Palestinian violence was escalating again despite US appeals for calm, with six Palestinians and one Israeli dead in a series of incidents two days after the assassination of an Israeli Cabinet minister.

Osama Bin Laden has in a statement warned that America may face more terrorist attacks saying: “neither America nor the people who live in it will dream of security.”

Israeli forces have began pulling out of the Palestinian town of Beit Jalla.

Israel has agreed to withdraw its troops from the Palestinian town of Beit Jalla under a ceasefire deal brokered by the European Union.

Israeli tanks rolled into a Palestinian village on the southern fringes of Jerusalem today, killing a Palestinian, in an effort to halt persistent gunfire raining on a nearby Jewish neighbourhood.

Israeli undercover troops shot dead a Palestinian militia leader in an ambush in Hebron today just hours after Israeli paratroopers took position at the entrance of another West Bank town in a warning to Palestinian gunmen.

Israeli troops and tanks took positions near the West Bank village of Beit Jalla today in an invasion-style operation, after a heavy exchange of fire between gunmen in the village and soldiers protecting a nearby Jewish neighbourhood.

An explosion has destroyed the one-story Hebron office of Fatah, the party of Palestinian leader Yasser Arafat.

Israeli army field commanders were today given permission to send troops into Palestinian areas without waiting for a go-ahead from superiors, after the first large-scale incursion into a West Bank town in seven months of fighting.

Israeli tanks have rolled into Palestinian-controlled territory and pounded houses with artillery as they pursued gunmen who had opened fire on Israeli forces.

At least 14 people were injured today when Israeli tanks fired on a Palestinian-controlled area outside Jerusalem.

Israeli soldiers shot and killed a local leader of the radical Islamic Jihad movement in the West Bank today, members of the militant group and Palestinian security officials said.