Earlier, despite stepped up international efforts to halt Mideast violence, both sides reported heavy fighting at a Gaza refugee camp; some 40 Palestinians were wounded. On the outskirts of Jerusalem, a gun battle erupted after an 86-year-old Israeli man was seriously wounded by Palestinian fire.
Palestinians claim Israeli troops killed a deaf Palestinian teenager in the Gaza Strip on Thursday near the border fence with Egypt.
Shadi Siyam of Rafah camp was the first Palestinian reported killed by Israel since Israeli Prime Minister Ariel Sharon called for a ceasefire on Tuesday night and ordered a tightening of army engagement rules.
Witnesses said a gunfight erupted when two Israeli tanks and a bulldozer tried to enter the camp. Hospital officials said Siyam was hit with a bullet to the heart. Neighbors said he was deaf and standing in front of his house unaware of the gun battle.
A senior Palestinian official vowed on Thursday that Palestinians would not stop an uprising against Israeli occupation in Gaza and the West Bank until Israel ended its occupation and halted Jewish settlement.
"The use of warplanes to bombard our cities, the use of violence, assassination and terrorism will never finish the Intifada," Dahlan said. "It will never stop the Palestinian people from achieving their rights."
The diplomatic push to end Israeli-Palestinian fighting began this week with the release of a truce plan proposed by an international commission headed by former U.S. Sen. George Mitchell. But there's been no letup in the daily clashes, mostly in the West Bank and the Gaza Strip.
President Bush called Palestinian leader Yasser Arafat and Israeli Prime Minister Ariel Sharon on Wednesdy and urged them to take steps to end the fighting that has derailed years of painstaking peace negotiations.
U.N. Secretary General Kofi Annan also spoke with Sharon on Wednesday, while Arafat met in Paris with French President Jacques Chirac. In addition, Sharon declared a unilateral cease-fire Tuesday, saying Israeli troops would only respond in "life-threatening" situations.
Speaking in Dublin, Ireland, Mitchell said before the new flare-up of violence that Israel's announcement of a limited truce was a "heartening sign" and that he hoped there would be further progress.
But the Palestinians rejected Sharon's move as a public relations ploy and the clashes have persisted.
Learn more about the history of the Arab-Israeli conflict.
Palestinians fired two mortar shells at dawn Thursday at the Jewish settlement of Netzarim in the central Gaza Strip, causing no injuries. An Israeli soldier was wounded overnight by a roadside bomb as vehicle passed by on the edge of the Gaza Strip, the army said.
Shortly afterward, five Israeli tanks entered a Palestinian area in central Gaza, opening fire with shells and heavy machine-guns at a Palestinian residential area and blocking a main road to Palestinian traffic, witnesses said. The tanks withdrew after about 30 minutes and the road was reopened.
Two Palestinians were killed by Israeli gunfire, hospital doctors said. Shadi Fiam, 20, died from a bullet to the chest as he was sitting outside his house in the Rafah refugee camp in the southern Gaza Strip. Later, Alla Adel Bouji, 15, died in a hospital after he was shot in the chest.
At midday Thursday in Tel Aviv, police closed and evacuated the central bus station, a six-story shopping mall including a bus terminal, and started searches. Israeli media reported the police were looking for Palestinian extremists and bombs. Police said some arrests were made. After searching for more than four hours, police reopened the complex.
The shooting Thursday followed heavy gunbattles Wednesday in the southern Gaza Strip, where 38 Palestinians were hurt, according to doctors. On the outskirts of Jerusalem, an 86-year-old Israeli man was seriously injured by a bullet to the chest. Also, a Palestinian shooting ambush killed an Israeli motorist in the West Bank.
The Mitchell Commission plan calls on both sides to halt violence and urges Israel to freeze construction in Jewish settlements in the West Bank and Gaza Strip.
Several such plans have failed to end the Mideast bloodletting, and the report has sparked a new round of angry verbal exchanges between Israelis and Palestinians.
Palestinian Information Minister Yasser Abed Rabbo dismissed Sharon's cease-fire call as "a public relations practice originally meant for the American and Israeli publics."
Israeli Foreign Ministe Shimon Peres urged the Palestinians to join the truce effort. "I read that some of our Palestinian neighbors said that this is just a trick, a public-relations trick, on the side of Israel. I invite the Palestinians to pull the same trick," Peres said.
Since the outbreak of fighting in late September, 472 people have been killed on the Palestinian side and 85 on the Israeli side.
©MMI Viacom Internet Services Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report