Israeli tanks and troops entered Palestinian-controlled territory in the West Bank and arrested seven suspected militants before withdrawing.
The incursion came hours after the Christmas Midnight Mass in the West Bank town of Bethlehem which was held without Palestinian leader Yasser Arafat, after Israel stopped him from attending the services.
In a broadcast on Palestinian TV, Arafat said he was prevented by tanks, the barriers and the rifles of the oppressors from celebrating Christmas in Bethlehem.
Meanwhile, Palestinian Planning Minister Nabil Shaath said contacts between Israel and the Palestinians were going forward, in an effort to quell the 15 months of fighting.
Earlier, Israeli troops pursued gunmen who shot toward Israelis from the Jordan side of the Israel-Jordan border. One Israeli was killed and three wounded, a military officials confirmed.
The Israeli army and Jordanian government said the troops did not enter Jordanian territory. It appeared Israeli troops were searching for the assailants in agricultural land leased by Jordan to Israel as part of the 1994 peace treaty between the two countries.
The Israeli army spokesman's office said the searches were coordinated with the Jordanian army.
PA