An Israeli army helicopter fired several missiles at a car in the Gaza Strip on Saturday, killing two Hamas militants in the latest violence battering a U.S.-backed peace initiative.

Palestinian Information Minister Nabil Amr said the attack in the Bureij refugee camp destroyed any chance for the resumption of talks with Israel and called on the United States to interfere and halt the cycle of violence.

In a separate Gaza incident, an eight-year-old Palestinian girl was killed by an Israeli tank shell while riding her bike near her home in Khan Younis, a town adjacent to a Jewish settlement, Palestinian security sources and medics said.

The army said troops opened fire in the area after an explosive device was detonated near an army patrol, damaging a military vehicle. An army spokesman said he could not confirm that anyone was hit.

Palestinian security officials said Abdullah Aqel, the leader of the Islamic group's military Izz el-Deen al-Qassam Brigades in central Gaza, was killed in Saturday's missile strike in Gaza along with Brigades member Farid Mayet.

"This attack will undermine our efforts to provide quiet and also will put an end to any hopes to resume the peace process," Amr said. "We hope our friends the Americans will interfere to prevent deterioration of the situation."

At least 10,000 people joined in the funeral march for the two militants, firing in the air, calling for revenge and chanting "(Israeli Prime Minister) Sharon, prepare the coffins!"

ISRAEL SAYS IT HAS NO CHOICE

Israeli security sources said that Aqel, 37, was behind recent rocket attacks on southern Israel from northern Gaza that Israel has suggested crossed its threshold for escalating an offensive against militants.

"The Palestinian Authority has so far done nothing to dismantle the infrastructure of terror according to the road map," said Foreign Ministry deputy director Gideon Meir. "Israel has no choice but to stop the terrorists before they strike us."

Saturday's missile attack came a day after Palestinian gunmen shot dead a Jewish settler in the West Bank.

Islamic militants renounced a seven-week-old truce on August 21 shortly after Israel killed Hamas's second-ranking political leader, Ismail Abu Shanab, by attacking his car with a missile following a suicide bombing that killed 21 people in Jerusalem.

Seven other militants have been killed in Israeli missile strikes since the bus bombing and Hamas leaders have told militants to lay low to evade helicopter attacks. Three Palestinian civilians have also been killed.

On Friday, the State Department said both sides had to act to advance the peace road map, which outlines reciprocal steps to end three years of violence and establish a Palestinian state by 2005.

Washington has called for the consolidation of Palestinian security forces under Prime Minister Mahmoud Abbas, who is locked in a power struggle with Palestinian President Yasser Arafat.

An Arafat loyalist in charge of government employees who was fired by Abbas on Wednesday refused to vacate his office on Saturday and brought in armed gunmen to back him up, saying he would obey only the president. Police avoided a confrontation and the left issue unresolved.

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