Israel turns tanks on gunmen

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

One Palestinian was killed and 20 were injured in one of the most intense shoot-outs in recent weeks which targeted the town of Beit Jalla, on Jerusalem's southern fringes.

Shooting erupted at several other spots in the West Bank and the Gaza Strip.

Amid the latest fighting, Israeli and Palestinian officials gave mixed reviews of the US-led Mitchell Commission, which issued a draft report of its investigation into more than seven months of violence.

Israeli Foreign Minister Shimon Peres described the report as "fair and balanced", but said Israel had reservations about its call for a halt to construction at Jewish settlements.

Palestinian Information Minister Yasser Abed Rabbo said the Palestinians "accept the findings ... in as much as they point directly to Israel's continued occupation of Palestinian land" .

But the report did not support the Palestinian call for an international force, which Abed Rabbo described as one of several "oversights".

Muhammad Abayat, a Palestinian militiaman, was killed when he was hit by a tank shell.

At least 20 Palestinians were hurt, according to the Beit Jalla hospital. The wounded included a five-year-old boy and an 11-year-old girl.