The death of a Palestinian militant in the West Bank Wednesday night and the wounding of three Jewish settlers in the Gaza Strip hours earlier, highlight the volatile situation in the search for peace, despite significant moves by both sides along the international "roadmap."
The violence came hours after Palestinian security forces returned to the streets of the Bethlehem Wednesday after Israel handed over responsibility for control of the West Bank town in the latest peace move.
Israel also released eight Palestinian prisoners who were arrested recently in the Hebron region and held without trial in the West Bank, Israeli public radio said.
The moves gave yet further impetus to the US-backed peace roadmap following a meeting late Tuesday between Israeli Prime Minister Ariel Sharon and his Palestinian counterpart, Mahmud Abbas, which saw both sides voice optimism for the future.
However a poll published Wednesday revealed that almost two-thirds of Israelis believe the truce will fall apart within a month. Those fears were swiftly underlined by the fresh violence.
A local head of the hardline Al-Aqsa Martyrs Brigades, linked to Palestinian leader Yasser Arafat's Fatah movement, was killed in an exchange of fire with Israeli troops overnight in the town of Qalqiliya, in the northern West Bank, a Palestinian security source said early Thursday.
Mohammed Shawa, 31, was killed while the soldiers were attempting to arrest him.
One of his supporters was injured and arrested in the Israeli raid which was backed by armored cars.
According to a military source, Shawa had been hit after be opened fire on the troops and attempted to flee.
Earlier three Jewish settlers were wounded when four anti-tank shells were fired in the Gaza Strip, an Israeli army spokesman said.
The mortars landed in the Jewish settlement of Kfar Darom, in the south of the Gaza Strip, the spokesman said.
Israeli soldiers and Palestinians exchanged automatic weapons fire around Kfar Darom following the incident, the spokesman said.
Also Wednesday an Israeli border guard was shot and lightly wounded near Tulkarem, in the West Bank, at the construction site of a security fence being built between the territory and Israel, military radio said.
Before the latest incidents of violence, US President George W. Bush, who convened a summit with Abbas and Sharon in Jordan a month ago, said he was "very happy" with the signs of progress.
"We're really happy with what we've seen so far, but we're realists," Bush told reporters at the White House.
A key to progress was making all sides realize "there's a better day ahead of them", he said.
Scores of police in dark-colored uniforms took up positions in Bethlehem after a Palestinian flag-raising ceremony over the local security headquarters.
The Bethlehem withdrawal came three days after Israeli troops pulled out of some reoccupied areas in the northern Gaza Strip and transferred policing duties there to the Palestinian services.
That coincided with a truce announcement by most armed Palestinian factions which is expected to help the Palestinian Authority pass the test as the army gradually hands over control of areas reoccupied since the start of the Intifada in September 2000.
Military radio reported that the latest security talks yielded an agreement for the rules of engagement to be tightened, with Israeli troops allowed to open fire only if their life is threatened.