Tension remains as more die

PALESTINIAN gunmen killed an Israeli officer in the Gaza Strip and Israeli forces shot dead a Palestinian in the West Bank yesterday, ensuring tension remains high despite a resumption of talks between the sides.

A military spokesman said the Israeli army captain was shot as troops searched for tunnels on the Egyptian border used by Palestinians to smuggle weapons into the southern Gaza Strip.

Commenting on the incident, the al-Aqsa Martyrs Brigades, a group with links to President Yasser Arafat's Fatah movement, said its forces had confronted an army patrol just inside Gaza.

In the West Bank, medical officials in Nablus said a 19-year-old youth died of chest wounds after an incident in which witnesses said an Israeli tank opened fire with a heavy machine-gun to disperse people violating an army-imposed curfew.

The army made no comment on that incident.

In a statement warning Prime Minister Ariel Sharon and US President George Bush of more attacks, the Brigades said: "Bush and Sharon must understand the battle of our people against them is long and will not be decided in one round or two."

The bloodshed underlined the problems involved in reviving peacemaking despite the emergence of faint signs of optimism after Israel and the Palestinians this week held their first high-level talks in four months and agreed on more contacts in the near future.

Israeli Foreign Minister Shimon Peres held two days of meetings this week with the Palestinians.

Sharon said afterwards that peace "looks distant". But he added: "Maybe some type of window has been opened."

Palestinian Information Minister Yasser Abed Rabbo cautioned against raising expectations too high, saying: "Israel did not promise anything. It just sends a false signal to the international community."

Sharon's Government has demanded Arafat's removal and previously cut off ties with his Palestinian Authority after a series of suicide bombings in the 21-month-old Palestinian revolt against Israeli occupation. Sharon and Bush have demanded an end to militant attacks and reforms of the authority as conditions for reviving peacemaking.

Political sources said Israel had agreed to set up a committee to discuss the matters raised during the talks and that it would study the possibility of releasing Palestinian funds that have been held in Israeli State coffers since the violence began.

Such a move would be part of measures to ease the hardships to Palestinians arising from army blockades, curfews, and the military reoccupation of Palestinian-ruled cities in the West Bank which Israel says is needed to block suicide bombers.