Search for militants in West Bank city raid

Israel today clamped down on the West Bank city of Nablus for the second time in a week, confining tens of thousands of people to their homes as troops moved searched for militants.

In nearby Jenin, undercover troops in a car shot dead three militants in a car park, including the chief spokesman for the Islamic Jihad militant group, Palestinian officials said.

The army has been operating in the West Bank's commercial centre since the weekend. Forces briefly withdrew on yesterday, but at dawn, dozens of jeeps backed by bulldozers moved back in.

Nablus, the largest West Bank city with 160,000 residents, is known as a hotbed of Palestinian militant activity. The Israeli army says most suicide bombers involved in attacks last year came from the area.

The operation in Nablus is the largest in the West Bank since July.

During today's operation, Israeli forces blocked all entrances to Nablus' crowded Old City - the focus of the raid - as they pursued suspects.

Witnesses said more than 100 jeeps patrolled city streets, enforcing a curfew that confined about 50,000 Old City residents to their homes.

As troops moved from house to house, the army broadcast messages on Palestinian TV and radio stations urging wanted men to surrender.

The army said it has arrested five people and uncovered three explosives laboratories. One Palestinian civilian has been killed since the operation began.

Wanted Palestinian militants were in hiding, but Palestinian officials said 10 people were wounded as troops clashed with Palestinian youths throwing stones. Fifty people were detained, though many were released, the officials said, and troops surrounded hospitals to check people going in and out.

"We can't continue to operate like this," said Adnan Kuzeih, manager at Itihad Hospital. "Our patients are suffering because the tear gas is coming into the hospital."

The army said one soldier was seriously wounded by a bomb.

In the Gaza Strip, Palestinian Prime Minister Ismail Haniyeh of Hamas accused Israel of trying to undermine Palestinian efforts to form a unity government.

Hamas and the rival Fatah movement are trying to finalise a power-sharing deal reached in Saudi Arabia earlier this month designed to halt months of infighting.

"It's clear that this Israeli escalation … is tied directly to Israel's rejection of the Mecca agreement, which strengthened national unity," Haniyeh said.

The international community has been reticent about recognising the new government. The platform falls short of international demands for Hamas to renounce violence and recognise Israel's right to exist.

But Palestinian President Mahmoud Abbas, a moderate from Fatah, has been trying to coax the West into accepting the deal, saying it is the best he can get from the violently anti-Israel Hamas.

Visiting European officials said today that divisions are beginning to emerge between the EU and the United States.

The EU external affairs commissioner, Benita Ferrero-Waldner, held talks with Palestinian officials. She said she found a "great awareness" among Palestinians of demands that a Fatah-Hamas government commit to peace with Israel.

"Nobody yet has a clue what the program of the government will look like," she said.

EU diplomats acknowledged the Europeans might be willing to engage "with some elements" of the coalition government, adding such a selective approach may not be shared by the US.

During a recent trip to the region, US Secretary of State Condoleezza Rice said Washington expects the new government to accept the international principles on dealing with Israel.

Israeli Prime Minister Ehud Olmert has said he will not deal with the new government if it does not accept the international conditions, though he would still be willing to talk to Abbas.

In Jenin today, Israeli undercover troops in a black car fired at a vehicle carrying three Islamic Jihad gunmen, witnesses said. The army confirmed its troops killed the men, saying they had helped to plan an attempted suicide bombing in Tel Aviv that was thwarted last week.

Two of the militants were killed instantly, and the third, Ashraf Saadi, was shot dead after he scrambled out of the car and tried to escape, witnesses said.

Saadi was the spokesman for Islamic Jihad, a militant group backed by Iran and Syria, and responsible for dozens of suicide bombings and rocket attacks against Israel.

The army said the troops tried to arrest him but he opened fire on them. Troops returned fire, killing two militants and injuring Saadi. After Saadi fled, continuing to fire, the troops shot him dead, the army said. One soldier was slightly wounded by gunfire.

In the Gaza Strip, Islamic Jihad spokesman Abu Ahmad vowed retaliation. Hamas also swore revenge.