An explosion in a public telephone booth near Bethlehem killed a Palestinian militant yesterday.
President Yasser Arafat's Fatah faction blamed Israel for the explosion.
The secretary-general of Fatah's Bethlehem branch accused Israel of assassinating Mohammed Abayat of the Fatah-affiliated al-Aqsa Martyrs Brigades in a bid to undermine a security agreement under which Israeli forces withdrew from Bethlehem two months ago.
Mr Abayat's death heightened tensions and shattered weeks of calm in the Bethlehem area in the West Bank ahead of talks in Washington on Wednesday between Israeli Prime Minister Mr Ariel Sharon and US President Mr George W. Bush.
The death came just hours after two Palestinians, one a toddler, were killed and more than 30 wounded in the Gaza Strip when Israeli troops raided a refugee camp in Rafah to destroy houses it said contained arms-smuggling tunnels.
Palestinians, and some Israeli politicians, have accused Sharon of using what Israel calls "targeted killings" of militants as a way to sabotage peace efforts that would force Israel to relinquish land occupied in the 1967 Middle East war.
Mr Sharon has said he is dedicated to finding a peaceful solution to the Israeli-Palestinian conflict but Palestinian "terrorism" must first be stopped.