Israel has destroyed at least 23 homes since last month, in what the government says is an attempt to send a message to "suicide terrorists and those participating that terror activity has a price that everybody involved in one way or another will pay.''
The military said soldiers destroyed the house of Iyad Sawalha, an Islamic Jihad member who blew himself up in a car next to an Israeli bus on May 6, killing 17 passengers. Troops also knocked down the family home of Murad Abu Asal, who blew himself up on Jan. 30, wounding two Israeli soldiers.
In violence Thursday, Israeli soldiers shot and killed two armed Palestinians who were crawling toward the fence around Gaza, apparently planning to attack soldiers or infiltrate Israel, the military said. The two were carrying a large bomb, the military said.
A 5-year-old child was killed Thursday in a residential area of Khan Younis in the central Gaza Strip, near an Israeli settlement, residents said. His grandfather and another Palestinian man were critically wounded, they said, charging that the shooting was unprovoked.
In a statement about the incident, the Israeli military said three Palestinians opened fire at soldiers and fled in a car. The soldiers fired back, wounding one of the men in the car. The military said it knew nothing of a wounded child.
Israel was absorbing harsh criticism after soldiers forced a Palestinian teenager to approach the house of a Palestinian militant to tell him to surrender. The youth, Nidal Daraghmeh, 19, was shot and killed, though it was unclear who opened fire.
The Israeli human rights group B'Tselem charged the military's use on Wednesday of Daraghmeh as a "human shield" was illegal. "It is not the duty of the Palestinian population to protect (Israeli) soldiers, but the military's," the group said in a statement.
After the gunfire, Israeli forces bulldozed a house on top of a wheelchair-bound Hamas leader, Nasser Jerar, 44, killing him. He lost both legs and an arm in May 2001 while trying to plant a bomb, the Israeli military said, adding that he continued to recruit suicide bombers for Hamas and was planning a bombing that would bring down an Israeli high-rise building.
Hamas is promising revenge. In Gaza, Hamas spokesman Abdel Aziz Rantisi said the death "will not pass without strong punishment."
At least 1,500 Palestinians and 588 Israelis have been killed since the uprising began in September 2000 after talks on creating a Palestinian state broke down.
Several hundred angry Palestinians marched in Jerar's funeral procession on Thursday in the town of Tubas.
As the violence continued, a high-level Israeli-Palestinian meeting originally expected Thursday to discuss a partial Israeli withdrawal in Gaza was put off.
Israeli Defense Minister Binyamin Ben-Eliezer was to see Palestinian Interior Minister Abdel Razak Yehiyeh to discuss an Israeli proposal called "Gaza First." However, the Israeli Defense Ministry said the meeting had been postponed. No reason was given. Palestinian officials said it would probably take place Saturday night.
Under the plan, Israel would pull its forces back from the outskirts of Palestinian population centers in Gaza and turn security over to Palestinian forces as a test case. If successful, Israel would implement the same procedure in the West Bank.
The situation in the West Bank is radically different from that of Gaza. Israeli forces moved into seven of the eight main Palestinian cities and towns after back-to-back suicide bomb attacks in Jerusalem in mid-June, imposing curfews. Palestinian officials say the Israelis have destroyed their security services in the West Bank, and they cannot stop militants planning attacks against Israelis.
The Israelis say Gaza is a good testing ground of Palestinian intentions because their security forces there are intact. However, in repeated air strikes, Israel has knocked down dozens of Palestinian police stations and headquarters in Gaza, as well as Palestinian leader Yasser Arafat's seaside headquarters. Arafat has not been in Gaza this year, confined most of the time to his West Bank headquarters in the town of Ramallah.
Also Thursday, Palestinian Finance Minister Salam Fayad announced creation of a holding company that will handle all Palestinian Authority funds, a key reform demanded by the United States and others.
U.S. and European governments have complained for years that the Palestinian financial structure is not transparent and does not allow donors to follow their money to projects for the benefit of the people.
Moving control of public and private funding to the new holding company, Fayad said, "I think it can ensure accountability and transparency and it will encourage the investors, especially those in the private sector."