Israel Arrests U.S. Al Qaeda Suspect

Israel said Wednesday it arrested a U.S. citizen of Arab descent last month on suspicion he transferred money to al Qaeda.

Khaled Nazem Diab, 68, who lived in Qatar in recent months, is suspected of funneling money to al Qaeda and other unidentified terror groups, Israel's government press office said in a statement.

Diab allegedly worked with an Islamic charity group, al-Najda, which has been investigated and shut down in the United States.

The statement said he had been detained for questioning when he arrived in Israel, but mentioned no charges being filed.

CBS News Correspondent Robert Berger reports there's growing Israeli concern about al Qaeda, after the group apparently carried out the attacks on Israelis in Kenya last week.

Meanwhile, Israeli soldiers killed two suspected Islamic militants Wednesday in a gun battle in a West Bank village, and Israeli helicopters fired missiles on a Palestinian government complex in the Gaza Strip, killing a security guard and injuring five people.

Berger reports the Gaza attack appears to have been an assassination attempt, but the one Palestinian killed was a security guard, and apparently not a wanted terrorist. However, Israel has accused the Palestinian security forces of direct involvement in terrorism.

Israeli troops searching for members of the militant Islamic Jihad group in Tufah village, near Hebron, came under fire, the army said, and soldiers shot back, killing two men. Palestinian medics said they found the men's bodies among trees in a remote valley, shot in the head.

In Gaza, a pair of Israeli helicopters fired several missiles at a small cinderblock room used by security guards at the Local Affairs Ministry complex in Gaza City, killing the guard, Mustafa Sabah, 35, Palestinian witnesses said.

After the first missile hit, driver Muhannad Abu Assi said he hit the ground, "and then I saw another three missiles coming at the same time. They hit the small room from two directions," he said.

Israel's army issued a statement alleging that Sabah was involved in three bomb attacks against Israeli tanks that killed a total of seven soldiers.

Diab had lived in Afghanistan, "and was in close contact with groups that identify with the Taliban," the statement said. Diab also had contacts with "activists connected to Hamas," the group that has carried out many suicide bombings in Israel.

The statement said Diab was expected to be deported after an investigation. The government did not say where he would be sent or if he was wanted by any other government.

Israeli troops Wednesday also closed offices where Israeli and Palestinian security officers once coordinated joint patrols.

Israeli soldiers in Ramallah and Jenin threw out the Palestinian security officers and confiscated their weapons. A military spokesman said the Ramallah office was closed because there is no longer any coordination there and armed Palestinians presented a danger to the Israeli forces.

Last week in the Gaza Strip, a Palestinian bomber blew up a car near a liaison office, killing himself, but causing no injuries to bystanders.

The U.S. ambassador to Israel told a security conference Wednesday that Palestinians had been ill-served by their leaders, who had created what he described as a failed political system.

Ambassador Daniel Kurtzer said Palestinian academics, intellectuals and political leaders have only encouraged more Palestinian suicide attacks by justifying them. More than 300 Israelis have been killed in suicide bombings.

"Suicide bombings...have begun to consume Palestinian society, calling into question their legitimate political aspirations," Kurtzer said Tuesday.

But he also forcefully restated U.S. opposition to Jewish settlement of the West Bank and Gaza Strip, lands the Palestinians claim for a future state.

Secretary of State Colin Powell "has said publicly that Israeli settlement activity has severely undermined Palestinian trust and hope," Kurtzer said.

In Hebron, the only West Bank city where Jewish settlers and Palestinians live in proximity, Israel plans to expand a settlement on the edge of the city.