Israeli troops have shot and killed two Palestinian militants inside a West Bank hospital, extending a new spiral of violence that has smashed a ceasefire vital to a US-backed peace plan.
Witnesses said three Palestinians being sought by Israel were sheltering ina small rooftop room of Rafidya hospital when Israeli forces stormed up and surrounded the building. A shoot-out ensued, with soldiers firing killing two militants and wounding the third. All three were members of the al-Aqsa Martyrs Brigades, an armed faction within the mainstream Fatah national movement of Palestinian President Yasser Arafat.
The killings came as tens of thousands of angry Palestinians calling for revenge marched in the funeral of Ismail Abu Shanab, a US-educated Hamas leader who was assassinated by an Israeli helicopter missile strike in Gaza city yesterday.
Islamist militant groups called off a seven-week-old ceasefire after Israel killed Abu Shanab in an attack that followed a Hamas suicide bombing.
"We love martyrdom and we seek martyrdom," Abdel Aziz al-Rantissi, another senior Hamas political leader who survived an Israeli assassination attempt in June, told the crowd as it chanted, "Revenge, revenge!"
Israel threatened more attacks on Palestinian militants. "This is only the beginning," a senior Israeli security source said. "We plan serious retaliation on the terrorist infrastructure," he added.
Israel renewed search-and-arrest operations in Nablus and other occupied West Bank cities shortly after a Hamas suicide bomber killed 20 people on a Jerusalem bus on Tuesday, an attack that Hamas said avenged recent army killings of Palestinians.
Yesterday, the army reimposed a curfew on the city, one of the largest in the West Bank and a major stronghold of militants who have spearheaded a 34-month-old uprising for statehood.
White House spokesman Mr Scott McClellan said President George W. Bush's main focus was on restoring Israeli-Palestinian dialogue broken off after the Abu Shanab killing.
Asked if Washington was going to urge restraint, he said: "We have always said that Israel has the right to defend itself but we have also always pointed out that the parties, including Israel, need to keep in mind the consequences of the actions they take...the effect of those actions on the peace process."
Mr Bush also announced a freeze on the assets of six Hamas leaders and five groups accused of supporting the group and ordered the Treasury Department to act.