Israeli soldiers killed two Palestinians, one a 12-year-old boy, in separate incidents on Wednesday, Palestinian witnesses and medics said, as fresh violence further battered a stalled U.S.-backed peace plan.

Israeli and Palestinian accounts of the incident involving the boy differed. The Palestinians said the boy had been playing with friends in the Balata refugee camp in the West Bank city of Nablus, while Israeli military sources said soldiers shot at a Palestinian throwing petrol bombs at them.

On Israel's boundary with the Gaza Strip, Israeli soldiers shot dead a Palestinian and wounded another and found an explosive device nearby that was apparently left by the pair, the sources said.

A Palestinian boy reads the Muslim holy book the Quran as men pray at the Al Emery Mosque in Gaza City, in the Gaza Strip, Wednesday, Oct. 29, 2003. The Muslim world is celebrating the holy month of Ramadan.  [AP]

The Palestinians had entered an off-limits area used before by gunmen to attack troops or to infiltrate into Israel, the sources said.

Palestinian security officials identified the dead man as Mohammed Aw'ad, 26, and said he was affiliated to the Islamic Jihad militant group.

BODY HANDED OVER

Aw'ad's body was handed over to Palestinian medics. The second Palestinian was in an Israeli hospital under guard.

The incident occurred near the Nahal Oz kibbutz on the Israeli side of the border with Gaza, an area where Palestinians planted an anti-tank land mine earlier this month and tried to carry out a suicide bombing last week.

In other violence, Palestinian gunmen from the al-Aqsa Brigades, linked to Palestinian President Yasser Arafat's Fatah faction, claimed responsibility for the shooting and serious wounding of a Jewish settler near the West Bank city of Jenin.

An Israeli tank on the outskirts of Jenin later fired shells at a house where the suspected attackers were believed to be hiding, military officials said. No casualties were reported.

The settler, a doctor, was airlifted to a hospital in Israel together with his wife who was treated for shock.

Most of the international community considers Jewish settlements in the West Bank and Gaza Strip to be illegal. Israel disputes this.

Persistent bloodshed has sidelined the U.S.-backed peace "road map," which charts steps leading to the establishment by 2005 of a Palestinian state in the West Bank and Gaza, lands occupied by Israel in the 1967 Middle East war.

Israel accuses Arafat of fomenting violence in a three-year Palestinian uprising for statehood, a charge he denies.

Despite the violence, the army said it would ease some restrictions on the movement of Palestinians in the occupied territories by restoring public transport between towns and permitting 4,000 Palestinians to enter Israel on business.

Salah Asaad, 16, from the Nusseirat refugee camp in Gaza, died Wednesday from wounds sustained in an Israeli air strike on October 20. The attack killed 12 Palestinians.

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