Israeli forces Thursday dismantled a Jewish settler outpost after clashing with settlers opposed to leaving West Bank land under a US-backed plan for peace with Palestinians.

Israeli soldiers arrest settlers who try to block the road leading to the Mitzpeh Yitzhar outpost. Hundreds of solders scuffled with hundred of settlers as the army dismantled the outpost following the implementation of the US-backed peace plan for Israel and the Palestinians. [AFP]

"Five hundred soldiers and 700 policemen have completed the dismantling of the illegal structures at the Mitzpeh Yizhar outpost," the army said in a statement.

Twenty-one security personnel were injured and 21 settlers arrested in disturbances occurring shortly after a suicide bomber from a Palestinian militant group hostile to peace steps killed a shopkeeper in northern Israel.

Leaders of the nationalist settler movement sought to make Mitzpe Yitzhar a showcase of their opposition to the troubled peace "road map" and summoned settlers across the West Bank to flock to the caravan site to thwart the evacuation.

Islamic Jihad claimed responsibility for the suicide bombing, a day after Palestinian Prime Minister Mahmoud Abbas again failed to persuade militants to make a truce with Israel.

Secretary of State Colin Powell, due in Israel on Friday to prop up the flagging peace process, said he saw signs of progress on an initial Israeli-Palestinian security agreement for northern Gaza but played down chances of an imminent deal.

"I am going to do everything I can to press both sides," he said on his plane en route to a stopover in Jordan.

Powell was due to have talks in Israel and the West Bank with Israeli Prime Minister Ariel Sharon and Abbas Friday, following up their June 4 peace summit with President Bush in Jordan that affirmed the road map.

More than 50 people have been killed since the summit.

Powell said he would get an update on Abbas's effort to negotiate a cease-fire, cautioning: "There is no reason to expect that it's suddenly all going to come together tomorrow."

MELEES OVER OUTPOST

The road map, envisaging a Palestinian state in the West Bank and Gaza by 2005, says scores of settler outposts built there after March 2001 must go. Some settlers accused Sharon, a longtime champion of settlement-building, of betraying them.

Meanwhile, Israel's aging left-wing icon and Nobel peace laureate Shimon Perez took back the reins of the stumbling opposition Labor Party in Thursday in a vote for a temporary chairman.

The former prime minister -- who has never won a general election -- easily beating two much younger rivals.

Riven by infighting after being routed by right-winger Sharon's Likud party in January's general election, Labor turned in desperation to Peres -- who will turn 80 in August -- to salvage its sinking ship.

He will serve as Labor's interim leader until June 15, 2004, when it will vote for a permanent chairman.

Peres said he would encourage Labor to show the public that Sharon's continued military measures against Palestinians despite the new peace plan would not work.

"It is not enough to fight terrorism, you have to fight the reasons for terror and what we propose is not a compromise peace but a peace of balanced people," he said in a victory speech.

Israel's swoop on Mitzpeh Yizhar was its first on an inhabited outpost built without state approval. It had previously scrapped several vacant outposts.

Military sources said soldiers remained on the hill after the operation ended to try prevent settlers slipping back up to reclaim it.

"For every hill removed, two more will sprout in its place," settler-rabbi Elyakim Levanon said earlier.

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