Palestinian gunman breaks into Jewish settlement, kills 2

JERUSALEM -- Two Israelis were killed when a militant Palestinian gunman broke into a Jewish settlement in the Gaza Strip on Tuesday night and seized a house, the army said.

In a highly unusual breach of security, the attacker crossed into the Alei Sinai settlement on the northern tip of the Gaza Strip, shooting at several residents and soldiers before entering the home, the army spokesman said. Two youths were killed and five other people injured, three of them soldiers, the spokesman said.

Israeli soldiers and the attacker were exchanging heavy fire as troops rushed to the area and army helicopters flew over the settlement, Israeli radio stations said.

Channel Two TV reported the gunman had taken four hostages inside the home. But the army said it was not immediately clear if any Israelis were in the building.

"We heard shooting and we quickly brought the children into the bathroom," settler Eli Bohadana told Israeli television. Bohadana's home is just a few yards from the house the gunman attacked. "We heard a real gunfight in the settlement, shooting between houses, and we knew it was something unusual."

An army officer among troops surrounding the home called out to the militant in a megaphone, asking him to surrender. His request was answered with a burst of gunfire, the army said.

Security breach

About 6,000 Jewish settlers live in closely guarded enclaves in Gaza, home to more than 1 million Palestinians. It was not immediately clear how the gunman managed to get past the Israeli security at the entrance to the settlement. The shootings marked the first killing of Israelis in eight days.

The shooting was the latest violence since a shaky cease-fire announced last week. "This is a very grave incident," said army spokesman Lt. Col. Olivier Rafowicz.

The assault could shake a truce to which both sides earlier had said they remained committed despite continuing violence that has left 18 Palestinians dead in less than a week. The truce completed a four-day trial period Tuesday.

It came as both sides reacted to word that the United States -- looking for calm in the region as it tries to build an anti-terror coalition -- had been planning a new peace initiative. The plan was put on hold by the Sept. 11 terror attacks in the United States and is only now beginning to take shape again.

Speaking in Washington on Tuesday, President Bush called for an end to the bloodshed. Looking toward hopes for the renewal of peace talks, he said "the idea of a Palestinian state has always been a part of a vision so long as the right to an Israeli state is respected."

Keeping its distance

Bush's administration has kept its distance from the Mideast conflict, in contrast to the President Clinton, who was actively involved as a mediator.

The Palestinians, who have been urging the Bush administration to get more involved, welcomed word of a new initiative. "I think it's a very important statement," Palestinian Cabinet member Saeb Erekat said of Bush's remarks. "I think it's time for the American administration to declare its support for a Palestinian state next to the state of Israel."

Israeli reaction was more cautious. Daniel Ayalon, foreign policy adviser to Israeli Prime Minister Ariel Sharon, said Israel's most immediate priority was ending a year of violence. "Everything will be put off until the violence stops," he said.

Asked about Bush's comments, Ayalon said: "It can't be an imposed solution. It has to be accepted by both sides."

Sharon has often said that he would be willing to seek a long-term interim agreement with the Palestinians, but does not believe a final settlement is possible at present. He has raised the possibility of a Palestinian state, but has not detailed his plans.

The Palestinians are seeking a state in the West Bank and Gaza Strip, with east Jerusalem as their future capital.