Israeli troops killed three Palestinian militants during a raid Thursday in the West Bank city of Nablus, and tension increased on the Gaza-Israel border as militants and the army traded rocket and artillery fire.
With homemade rocket attacks increasingly approaching sensitive Israeli sites, including a power station and a fuel depot, an Israeli leader threatened a fierce response, including an invasion by ground troops — a step the Israelis have avoided since their pullout from Gaza in the summer.
Now that Israeli settlements have been removed from northern Gaza, militants can bring their rockets closer to the border fence.
Rocket fire from Gaza is often linked to Israeli raids in the West Bank, with Gaza militants claiming their right to retaliate.
Early Thursday, Israeli soldiers entered Nablus and opened fire on a four-story building where militants were holed up, the military said. The three were shot after they fired at the soldiers and tried to escape, it said.
Witnesses identified one of the slain men as Bashar Hanani, the Nablus leader of the small Popular Front for the Liberation of Palestine. Israel said Hanani masterminded a suicide bombing in the open-air market in Tel Aviv in November 2004 that killed three Israelis.
The other two were members of the Al Aqsa Martyrs' Brigades, linked to Palestinian leader Mahmoud Abbas' ruling Fatah Party.
The PFLP threatened revenge.
"Israel will pay the price for this crime," said a PFLP leader Kaed al-Ghoul.
About 3,000 people gathered Thursday afternoon in Nablus' main square at a joint funeral for the militants. Dozens of gunmen fired in the air, and the crowd chanted, "Bashar, our friend, the response will be in Tel Aviv!"
Meanwhile, Abbas is trying to reunify his fractious Fatah before Jan. 25 parliamentary elections, in which the Islamic militant group Hamas is poised to score significant gains, possibly even an overall victory, in its first run for parliament. Hamas opposes the existence of Israel and has killed hundreds of Israelis in attacks.
Ten Palestinian factions, including Hamas, appealed to Abbas on Thursday not to postpone the election, even if Israel bans voting in east Jerusalem, said Palestinian negotiator Saeb Erekat. Israeli officials have said they would not allow Jerusalem's Palestinians to vote because Hamas is in the race, but no final decision has been made.
Erekat urged Israel to make its ruling soon. He said Abbas told the factions he would discuss Israel's ruling with them, and they would decide the fate of the election together.
Erekat warned of civil war if the election is canceled.
"The only thing that was going to lead to the rule of law was elections," he said, referring to widespread disorder in the Palestinian areas.
Israel, too, is in the midst of an election campaign, with voting set for March 28. Escalation in Israeli-Palestinian violence is likely to help hard-liners on both sides — and harm the incumbents, Abbas and Israeli Prime Minister Ariel Sharon.
In a phone conversation with U.N. Secretary-General Kofi Annan, Sharon said he would return to work Sunday, a week after suffering a mild stroke, Sharon's office said in a statement.
Escalation appeared a distinct possibility after Palestinian militants in northern Gaza fired more rockets at Israel — one exploding among a group of soldiers guarding the border, slightly wounding five.
Other rockets have landed outside Ashkelon, an Israeli city a few miles north of Gaza. The rockets exploded not far from vital installations such as a power station, water desalination plant and fuel depot.
"Certainly if the rocket fire on Ashkelon does not stop, there will be a very fierce response, and no option can be ruled out, including a ground operation," Vice Premier Ehud Olmert said on Israel TV.
Since it completed its withdrawal from Gaza in the summer, Israel has refrained from sending ground forces back in. Before the pullout, Israel often took over swaths of northern Gaza to move Israeli towns out of range.
With rockets falling near a main city for the first time and others exploding among soldiers inside Israel, the government was facing pressure to stop the barrages. Israeli TV stations interviewed worried Ashkelon residents and angry parents of soldiers living in tent encampments along the Gaza border.
Israel's initial response was to fire artillery at the empty fields used as rocket launching sites, and a Palestinian died in disputed circumstances.
The family of Ibrahim Naana, 21, said he was killed by shrapnel from the shelling. The army said the area was empty during the artillery barrage.
The Palestinian Interior Ministry said it was opening an investigation following reports that Naana was killed when he handled an object that exploded.