CBS News Correspondent Robert Berger reports the man was a senior member of the Islamic militant group Hamas, trapped Monday in the West Bank town of Hebron. The gunman fired at the soldiers, and Israeli tanks responded by blasting the building with several shells. Then the army blew up the building, burying the wanted militant under the rubble.
The army said the dead man was a local Hamas commander, responsible for many deadly attacks on Israelis in Hebron and Jerusalem.
Residents said the armed man had entered their house and threatened them at gunpoint. The owner of the house, Islamic studies teacher Akram Sahnin, is not wanted. Sahnin's son is a Hamas activist who is serving a six-year prison term in Israel.
Israeli Prime Minister Ariel Sharon, meanwhile, rebuffed complaints that his threat to "remove" Yasser Arafat — presumably by expulsion or assassination — has further weakened Israel's international standing. Sharon noted that Palestinian militants have refrained from attack Israel in recent days.
"I don't know what the reason is for the quiet, but it is certainly possible that this stems from the fact that Arafat is frightened and working to prevent terror attacks," the Yediot Ahronot daily quoted him as telling his Cabinet on Sunday.
A Cabinet official briefing reporters confirmed Sharon indicated that the current lull in violence could be linked to the threat to expel Arafat.
Later Sunday, at an 80th birthday bash for Israeli opposition leader Shimon Peres, Sharon hinted he would like to bring Peres' moderate Labor party back into his center-right coalition. "Maybe, Shimon, we will be able to go together again when ahead of us there is one joint goal to strengthen and fortify an Israel that lives in peace and security," he told an audience of more than 2,000 people, including former presidents Bill Clinton and Mikhail Gorbachev, at Tel Aviv's Mann Auditorium.
Labor bolted Sharon's coalition in November 2000, and Peres, once a strong advocate of a broad-based coalition, seems to oppose the idea now.
"We do have a sense of his vision and of his courage," actress Kathleen Turner said of Peres at the gala.
Many Israelis on the other hand see Peres as a dreamer, and believe his vision of peace was not based in reality.
Mr. Clinton implored Israel to keep pushing for peace with the Palestinians. "Every year the Palestinians grow larger, younger, poorer and angrier," the former president said. "We can go on. They will continue to kill, and you will continue to prevail. But they will break your hearts and twist your children's future and theirs."
In the Gaza Strip, Palestinian Prime Minister-designate Ahmed Qureia wrapped up talks with opposition groups on the formation of his new Cabinet, which is expected to be presented within a week. Hamas, Islamic Jihad and a radical PLO faction turned down his request that they join the government.
Israel's Haaretz newspaper reported Palestinian officials say the cabinet is likely to include a Hamas supporter and a moderate favored by the United States.
Qureia told participants he would work for a cease-fire with Israel, and denounced what he called the "chaos of weapons" in the Palestinian areas. However, he stopped short of saying he would disarm militant groups as is required by the U.S.-backed "road map" peace plan.
Israel has been rounding up Palestinian militants in an attempt to weaken the groups and prevent attacks on Israelis.
The security barrier is also supposed to prevent Palestinian suicide bombers and other attackers from infiltrating Israel. Both the U.S. government and the Palestinians fear it will create a de facto border, leaving parts of the West Bank in Israeli hands. The Palestinians claim all of the territory for a state.
Since it occupied the West Bank and Gaza in the 1967 Mideast War, Israel has built 150 settlements, where about 220,000 Jews live. Their backers want to include as many settlements as possible on the "Israeli" side of the fence.
The main sticking point is Ariel, with 15,000 residents the second-largest settlement, in the center of the northern part of the West Bank. Many in Sharon's favor a route for the barrier that dips into the West Bank to include Ariel. This has enraged Palestinians, who see it as a land grab, and the United States, which sees it as pre-empting negotiations over the final borders.
The Israeli delegation, headed by senior Sharon adviser Dov Weisglass, will meet with U.S. national security adviser Condoleezza Rice and other officials Monday, an Israeli official said. A decision on the barrier's route is to be made after the delegation returns to Israel on Wednesday.
Israel is open to compromise, said Justice Minister Tommy Lapid. Sharon reportedly has endorsed a plan to leave open the section in the Ariel area for now.
Israel has completed about 90 miles of the barrier and decided to speed up construction following two suicide bombings on Sept. 9 that killed 15 people. Once completed, the fences, trenches, razor wire and concrete walls could eventually run more than 360 miles, depending on the ultimate route.