Israeli airstrike kills at least 11

GAZA CITY, Gaza Strip -- An Israeli air force F-16 blew up a house belonging to a Hamas leader in Gaza City early Tuesday, killing at least 11 people including his wife and three of their children, Palestinian officials said.

The missile strike -- which doctors said also injured more than 100 people -- came at a delicate time in Palestinian-Israeli relations with the sides trading ideas to relieve tensions in the West Bank. But the attack appeared likely to derail the efforts as Hamas threatened revenge.

The house belonged to Sheik Salah Shehada, founder of the military wing of Hamas, known as Izzadine el-Qassam, in Gaza and the West Bank, security officials said.

Shehadeh's wife and three of their children were killed, said Hamas spokesman Ismail Haniyeh. He did not say whether Shehadeh himself was among the casualties. But announcements on loudspeakers in Gaza said Shehadeh was wounded.

In a statement, the Israeli military confirmed that Shehadeh was the target and said he was hit.

The military said Shehadeh was behind "hundreds of terror attacks in the last two years against Israeli soldiers and civilians."

Hamas threatened to hit back. "Not only will Hamas take revenge for the martyrs, all the Palestinian people will unify to revenge for the blood of the martyrs," Haniyeh told reporters at Gaza's Shifa hospital, where the dead and wounded were taken.

The Hamas military wing has claimed responsibility for dozens of attacks against Israelis during nearly two years of fighting, including many suicide bomb attacks. Also, Hamas has been behind almost daily mortar attacks on Jewish settlements in the Gaza Strip.

Several weeks ago, Israeli Prime Minister Ariel Sharon said Israel would deal with the militant groups in Gaza.

So far, Israel's ground operations in Gaza have been limited to areas near the settlements.

Earlier Monday, the two sides appeared to be moving toward easing months of tensions. Israeli Foreign Minister Shimon Peres had said that the army was prepared to withdraw from two West Bank towns, Bethlehem and Hebron, as long as they remained quiet and if the Palestinians assumed control of security.

A top member of Hamas said the group was considering stopping suicide attacks if Israel withdraws; and an Israeli official said the government was looking into resuming security cooperation with the Palestinians after it pulls out.

However, more hawkish elements of Israel's government expressed deep skepticism about the possibility of reaching any deal that would hold. They suggested that Israel would remain in the Palestinian towns for considerable time -- even until Palestinian leader Yasser Arafat was no longer in power -- and suffice for now with efforts to aid the population there.

Also Monday, Israeli police reopened the university offices of the leading Palestinian official in Jerusalem, Sari Nusseibeh. Police closed his office two weeks ago, alleging that Nusseibeh, the president of Al Quds University, had violated peace accords by engaging in Palestinian political activity in Jerusalem.

Nusseibeh, who is also the chief representative of the Palestine Liberation Organization in Jerusalem, said he signed a document Monday agreeing not to use the premises for political activity. However, he said he'd conduct his PLO activity elsewhere.

The Palestinians want east Jerusalem for the capital of a future state, while Israel claims sovereignty over the entire city.

The emerging divisions in Prime Minister Ariel Sharon's government over the issue of a West Bank withdrawal came after Peres and Cabinet member Dan Naveh, a member of a member of Sharon's hawkish Likud party, met Saturday in a Tel Aviv hotel with a Palestinian delegation headed by Cabinet Minister Saeb Erekat.

The meeting was also attended by the new Palestinian interior minister, Abdel Razak Yehiyeh, who is responsible for security in the Palestinian territories.

The Israeli daily Haaretz reported Monday that Yehiyeh outlined a proposal to resume security cooperation with Israel after Israeli troops withdraw. Security cooperation, in which the sides share information and act jointly where possible to prevent attacks, ground to a halt after fighting erupted in September 2000.

Palestinians would undertake to confiscate illegal weapons and arrest militants, Haaretz reported. In return, the newspaper said, Israel would free prisoners arrested in the fighting, end its strikes on Palestinian targets and end its "targeted killings" of militants -- which the Palestinians call assassinations.

The proposal was similar to a deal worked out last summer by CIA director George Tenet that was never implemented as the violence escalated.

But Ranaan Gissin, Sharon's spokesman, said Israel wouldn't make any concessions before the Palestinians moved to end attacks.

"There will be no concession on security until we see them take steps," he said, adding that as a first move the Palestinians should assume security control in the Gaza Strip to show that they were willing to crack down on militants.

Naveh said he doubted the Palestinians would crack down. He suggested the Israeli army would remain in the West Bank until the Palestinian leadership is replaced.

Earlier Monday, Peres confirmed Palestinian claims of an Israeli offer to pull troops out of the West Bank towns of Hebron and Bethlehem if Palestinian security takes control. He did not say when it might take place.

"We really want to get out of there as soon as (Palestinian) security is deployed," Peres told Israel Radio. Asked if he was confirming reports that the army would withdraw from towns, Peres said, "Yes, there are towns that are more quiet than others; Hebron, Bethlehem and Jericho."

Israeli troops moved into seven of the eight major Palestinian cities and towns in the West Bank after two suicide bomb attacks in Jerusalem more than a month ago.

Palestinian officials have demanded Israel withdraw, saying they can't prevent attacks against Israelis as long as the army is in place, enforcing curfews and hunting down militants.