Israelis kill eight in Gaza gun battles

ISRAELI troops killed eight Palestinians yesterday in the deadliest raid in the Gaza Strip in more than a month, casting a shadow over a new American push to salvage a battered peace plan.

Islamic Jihad, one of the main groups behind a campaign of suicide bombings against Israelis, vowed revenge, saying four of its fighters including two field commanders were among those killed during fierce gun battles in Gaza City.

"The bloody message has been received ... and the Palestinian people will know how to respond to it," Islamic Jihad leader Mohammed Al-Hindi said.

The raid, which Israel said was aimed at rooting out militants who frequently attack a nearby Jewish settlement, began as US envoy John Wolf headed for talks with Palestinian Prime Minister Ahmed Qurie in the West Bank city of Ramallah.

Returning after months of absence, Mr Wolf pressed Mr Qurie and Israeli Prime Minister Ariel Sharon to hold a long-delayed summit crucial to reviving a peace "road map" and demanded that Palestinians curb militant violence, officials said.

"This continuous aggression against our people should be stopped," Mr Qurie said.

Preparations, meanwhile, moved into high gear for Israel's planned release yesterday of 436 prisoners, most of them Palestinians, in a German-mediated swap with the Lebanese guerrilla group Hizbollah.

They will be freed in return for a kidnapped Israeli businessman and three troops presumed dead after they were abducted while on border patrol in 2000.

Israeli army forensics experts and rabbis responsible for identifying the soldiers, if dead, headed for Germany, where part of the exchange will take place.

Early yesterday, two Israeli tanks and several armoured bulldozers moved out of the Jewish settlement of Netzarim, a frequent flashpoint, witnesses said. "The operation was intended to strike at people who every night are firing mortars and planting bombs against Netzarim," an Israeli army spokesman said.

Gun battles erupted with dozens of militants in Gaza's Zeitoun neighbourhood. Medics said five of those killed were militants and three were civilians, including a 17-year-old.

Seven Palestinians were wounded, including an ambulance worker whose vehicle was struck by what medics said was Israeli fire. The army denied troops fired at an ambulance.