territories and Israel, as violence escalated after the region’s worst suicide bombing in nearly a year.

The clashes included a major missile attack by Israeli helicopters into a Palestinian orchard in which at least two teenagers were mistakenly killed, Palestinian officials said.

But two Palestinian militants who appeared to have been the intended target of the strike in the Gaza Strip fled the scene unscathed in a car, the Reuters news agency quoted medics and witnesses as saying.

In the south, Israeli security forces killed two Palestinians they said infiltrated across the border from neighbouring Egypt near the town of Nitzana. One Israeli soldier was wounded in the exchange of fire, the Voice of America (VOA) network reported.

EGYPT

Egyptian officials had no immediate comment on the incident at the Nitzana crossing, which analysts said was a rare departure from the relative calm prevailing along the boundary since Egypt signed the Arab world’s first peace treaty with Israel in 1979.

The clash in the border area reportedly came after an Israeli tank raid into a nearby Palestinian-administered Gaza city in which a Palestinian was killed and 14 wounded in street battles, Reuters said. Several Palestinians also died in Hebron and other towns during other battles with Israeli forces.

The militant Hamas group, which has also carried out suicide attacks, responded to the Israeli military action and fired three rockets at the southern Israeli town of Sderot, injuring one person, the British Broadcasting Corporation (BBC) said.

ARMY

Israel’s army has stepped up its actions against perceived terrorists following last week’s suicide bombings in Israel’s largest city of Tel Aviv that killed 22 people and wounded up to 100 others.

The Palestinian Authority says Israel has increased its "attacks" to distract voters from election-related scandals. Palestinian Chief Negotiator Saeb Erekat told the French News Agency AFP, that Israeli Prime Minister Ariel Sharon "misused" the army.

"These operations were an attempt by the Israeli Government to escape corruption accusations and influence the Israeli electoral campaign by perpetrating more killings, destruction and state terrorism in the territories," he was quoted as saying.

HARDLINE

But Israeli Prime Minister Sharon defended his hardline policies Sunday, January 12, saying that Palestinian leader Yasser Arafat "is an obstacle to peace," as he allegedly refuses to combat terrorism.

"For the president of the Palestinian Authority, the murder of Israelis is a permanent goal coupled with political considerations," Sharon reportedly told the Israeli cabinet, referring to Arafat.

"In (Arafat’s) opinion, assassinations of Israelis before an electoral period are legitimate, but should be stopped in the run-up and be resumed after the vote," the prime minister said

PLEA

Sharon also rejected a plea from British Prime Minister Tony Blair to lift a ban on Palestinian officials attending a Mideast conference this week in London. The plea was in a letter delivered by the British ambassador to Israel, VOA said.

At least 1,775 Palestinians and 693 Israelis are said to have been killed since the Palestinian uprising began after a collapse of negotiations on Palestinian statehood in mid 2000.

The latest fighting came after a tense Orthodox Christmas in Bethlehem where Eastern Christians urged Jews to embrace them as friends to make sure that Arafat will not be seen as the protector of churches.

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