Gun fight near West Bank town; 17 suspected militants arrested

Associated Press WriterJERUSALEM (AP) -- Israeli troops exchanged fire with Palestinian gunmen in a West Bank town Wednesday and arrested 17 suspected militants during a separate incursion into a village.

Despite the renewed friction, Israeli and Palestinian security commanders met for the first time in a week to try to shore up a tentative truce.

Palestinian officials said the two sides agreed on a number of steps to ease daily life in the Gaza Strip, including the rebuilding of the landing strip at Gaza International Airport that was destroyed by Israeli bulldozers earlier this month. Opening hours at the Rafah crossing between Gaza and Egypt were to be extended, said Brig. Gen. Abdel Razek Majadie, Palestinian police commander in Gaza.

Also Wednesday, the Israeli military lifted its blockade of the West Bank town of Jericho, permitting residents to enter and leave. Like other Palestinian communities, Jericho had been under closure for most of the 15 months of fighting.

Israel says the restrictions are necessary to prevent attacks by militants on Israelis. The Palestinians say the travel ban is collective punishment.

Israeli Foreign Minister Shimon Peres expressed modest optimism Wednesday that talks might get back on track.

"I think that the chances for peace had reached the lowest point, the zero point," Peres said during a visit to Ukraine's capital, Kiev. "I think we have departed from the zero point and begun to move."

Despite a sharp drop in tension in recent days, a gunfight erupted Wednesday on the outskirts of the West Bank town of Jenin. The Israeli military said Palestinians opened fire on Israeli troops near the Jewish settlement Kadim, then sought refuge in a house in Jenin, which is under Palestinian control.

In pursuit of the gunmen, Israeli tanks drove about 300 yards into Jenin, residents said. The military said soldiers encircled the house, and fired two tank shells at the building. Both sides reported persistent gun battles at the scene. A Palestinian policeman was wounded in the fighting, Palestinian officials said.

Earlier Wednesday, Israeli troops entered the village of Azun, which is under joint Israeli-Palestinian control, and arrested 17 suspected militants, the army said. Five of those arrested were Palestinian policemen, according to the mayor.

Israel's government, meanwhile, continued to absorb criticism from abroad and at home for barring Palestinian leader Yasser Arafat from Christmas celebrations in Bethlehem, Jesus's traditional birthplace. Israel insists that Arafat remain in the West Bank town of Ramallah until he arrests the assassins of Israeli Tourism Minister Rehavam Zeevi.

Arafat's absence was the center of attention in an otherwise low-key holiday in tourist-starved Bethlehem and added another layer of gloom to the already depressed atmosphere for local Christians.

Even the Midnight Mass and the morning service in St. Catherine's Church, next to the ancient Church of the Nativity, marking the traditional birthplace of Jesus, did not draw large crowds. Almost 15 months of Palestinian-Israeli violence has frightened tourists away and wrecked Bethlehem's tourism-based economy.

Pictures of Arafat and Palestinian flags far outnumbered Christmas decorations in Manger Square in front of the Church of the Nativity. The square, remodeled in time for millennium year Christmas celebrations that were scuttled by the beginning of the violence, turned back into the pre-remodeling parking lot on Christmas Day, as shopowners sat forlornly in their empty souvenir stores.

Israel stuck by its decision to ban Arafat from Bethlehem despite an onslaught of criticism from the Palestinians, the European Union, Vatican, six Christian denominations represented in the Holy Land, and Israel itself, where moderate Cabinet ministers and President Moshe Katsav, an ally of Prime Minister Ariel Sharon, spoke out against the ban. On Tuesday, Chief Rabbi Israel Meir Lau added his voice, saying it was "unwise" for Israel to take steps that limited religious freedom.

Undeterred, Israeli officials said the issue was not religious freedom. As a Muslim, Arafat's presence in Bethlehem would be an unwarranted political boost, they said.