gunmen opened fire inside the dining hall of a West Bank Jewish settlement.

Islamic Jihad claimed responsibility for the attack at the Otniel settlement southwest of Hebron, which came shortly after militants pledged to revenge the killings of about eight Palestinians by Israeli forces in the last two days.

"They should not feel safe," the spiritual leader Sheikh Ahmed Yassin of Hamas, another radical organization, was quoted as saying by the Reuters news agency at a Gaza City open-air event attended by tens of thousands of Palestinians.

Members of Hamas, which has claimed responsibility for several suicide bombings, were also seen burning American and British flags while waving the Iraqi colors.

RESISTANCE CONTINUES

"Resistance will continue as long as the occupation does," the spiritual leader said at the rally marking the 15th anniversary of Hamas’s founding, as Palestinians held funerals for the those killed. Israel said those killed included militant leaders and other combatants.

Among the dead was also Mahdi Abu Obeid, 17, who his family says was shot and killed on his way home from school in Ramallah, to tell his family he had done well in an exam. He was standing near the spot where Israeli undercover forces killed a Hamas activist and detained another, Reuters and other media reported.

The Palestinian leadership has accused Israeli Prime Minister Ariel Sharon of escalating the violence in a bid to win votes in next month’s legislative elections.

MILITARY ACTIONS

However Israeli officials have made clear they have no other option than to step up military actions in the wake of suicide attacks and shootings like those at the Jewish settlement. Israeli troops also pushed back into the center of Bethlehem to re-impose a curfew that had been lifted during Christmas, reporters and residents said.

At least 1,746 Palestinians and 671 Israelis have been killed since the Palestinian revolt began after the collapse of negotiations on Palestinian statehood in the West Bank and Gaza Strip, territories Israel captured in the 1967 Middle East war, Reuters reported.

Thousands of Christians have reportedly fled the region in the last two years of violence.

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